Tesco’s new UK chief executive Richard Brasher has praised “resourceful” consumers as the public battles unemployment and higher taxes.
Brasher highlighted current trends at the annual Retail Week Conference - his first opportunity to speak to other retailers since moving into his role as head of Tesco’s business in the UK two weeks ago.
He unveiled new Tesco customer research which illustrated how families are experiencing economic uncertainty very differently from one another.
Brasher said: “We all know that the economy is having a big impact on consumer confidence - whether it’s unemployment, higher taxes, public spending cuts or higher fuel prices. But these trends are experienced by different families in very different ways. An affluent family might not notice a rise in food, VAT or utility prices. But to a lower income family these increases mean £12 less to spend each week. That is equivalent to an increase in income tax of almost five percentage points. A single act or event in the national economy becomes millions of individual experiences in people’s actual lives…
“Families are often pleasantly surprised that being more resourceful can be enjoyable,” said Brasher. “They have learned to budget better, to cook from scratch, to do DIY.”
Tesco believes this adaptability has produced a new trend - “the emergence of the determined and informed consumer, knowing there is always a good deal out there”.
“This doesn’t mean that we are in a vicious cycle of prices being battered down and down. Value for money trumps being the cheapest. Value for money can mean food that is fresh or made for one - because that means less waste. It can mean doing more home-cooking with quality ingredients,” said Brasher.
The supermarket has responded by investing in lowering prices - £200 million on more than 1,000 lines - and by launching 2,100 new and improved products. It has introduced new corporate partners - such as London Aquarium and Disneyland Paris, to Clubcard Rewards.
Brasher added: “Times are tough - but customers are determined to get through to the other side. We’ve got to help them. This is what going the extra mile for customers is all about. But we must also understand that their ambitions have not disappeared. They just need more help in realising them.”
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