Tesco’s downward performance has weakened the grocery market as a whole, claimed a leading supermarket figure.
Andrew Higginson, incoming Morrisons chairman, shared his insights on the sector in the period since leaving Tesco as finance director and re-entering the industry this October. He also accused the big four of focusing too much on each other to the detriment of good engagement with their customers.
“Tesco has been a weak player in the past few years and it has made the industry weaker,” Higginson told delegates. “Competition is good for you and makes you have a better business. Having the market leader off form at the moment isn’t great for whole industry.”
He also praised the discounters for playing it right, where the supermarkets lost focus. “Management teams often seem focused on the wrong thing,” he continued. “It strikes me that Aldi and Lidl haven’t got cheaper – supermarkets have got more expensive.
"The discounters, in a way, have read the customer better during the recession, Supermarkets haven’t focused on customers, but have been focused on each other. In essence, they are shouting about how they are cheaper compared to another – it is the big four talking to each other. Customers know the big four haven’t been cheap and, as they do in retail, customers vote with their feet.
“Customers have lost trust in supermarket pricing and it will take time for supermarkets to rebuild that trust. You cannot explain your way out of a position that you’ve behaved your way into - to get out of it supermarkets are going to have to change their behaviours.”
Other supermarket heavyweights speaking at the convention included Dalton Phillips, chief executive of Morrisons, who referred to the need to differentiate the business. Meanwhile Asda chief executive and vice-president of the IGD Andy Clarke focused on strategy being the key to success, but emphasised the importance of executing the strategy correctly. “The best decision is to do the right thing, the second-best is to do the wrong thing and the third is to do nothing at all,” he said.
“This industry is going through rapid change and how we embrace it is something we should all think long and hard about.”
He left delegates on a positive note, however: “The future of retail has never been more challenging, but has also never been brighter.”