Is the end of 24 hour shopping at Tesco’s drawing near?
It has been many years since Tesco first introduced their open all hours policy which meant throughout the week and into the weekend, with the exception of Saturday night and Sunday trading hours, customers could shop 24 hours a day. This mean consumers were introduced to the ability to shop throughout the night; should they wish to do so. At the time this move demonstrated not only the continuing growth of the Tesco market share but also the increasing consumer demand to access goods and services as and when they please. However a recent update from Tesco suggests they are slowly moving away from this approach to shopping, citing that ‘a change in consumer spending habits means the service is no longer needed’. Over the last few months this change has effected a further 20 stores meaning that in total 76 stores will no longer offer the 24/7 hour, which amounts to a quarter of their 400 stores nationwide. This move means most of the effected stores will now close their doors at midnight and will subsequently reopen at 6am the following day. Given the fact that Tesco’s first introduced these ‘open all hours’ stores a staggering 20 years ago, it is understandable that this latest news has caused a buzz to surround the supermarket and their reasons for doing so.
It would appear that this latest change is another step in the supermarket giants attempt to refocus and regroup their core business and furthermore business goals for the future. For some time now Tesco has reported that poor stock replenishment and stock availability has affected not only their overall sales performance but also their market share. It is clear to see that the likes of Lidl and Aldi are rapidly making their mark on the sector, as demonstrated by not only awards but also increasing consumer popularity. This latest move to once again means a reduction in the number of 24/7 stores means Tesco will have better ability to restock their stores efficiently and effectively. Of course in the middle of all this are the staff who occupy these hours currently and as such Tesco has started a 45 day consultation period for the 2000 night shift staff who will be effected.
This is not the latest or most dramatic of the moves seen by Tesco in recent times. Namely there was their decisions concerning other company portfolio businesses which have now been sold on. One of the most interesting concerns to have received a shakeup is that of their purchase of the Giraffe restaurant chain some three years ago. It was in fact confirmed that Tesco have sold the entire chain to Harry Ramsden having purchased it for 50 million pounds in the first place. This is coupled with the sale of Dobbies earlier this year. Dobbies being the UK’s second largest garden centre chain was sold by Tesco for 217 million pounds and at the time of sale it was sited that Tesco wanted to remain true to its core business and with that focus their efforts on that of their supermarket customers. The chief executive of Tesco, David Lewis, has explained that the supermarket giants move to sell off other businesses from within the brand portfolio has been to allow them to deliver a higher level of service and customer care via their Tesco stores.
Whilst Tesco maintain all of its most recent moves have been in the name of improving customer service and by all accounts this is supported by their latest figures, released in April of this year, where they reported their first rise in underlying operating profit for 4 years, it still appears certain that changing consumer spending habits are playing a role. Not only are other supermarkets acquiring increasing market share but also consumers are spending their money differently. Many consumers have been converted to online shopping, thanks to the range of product selection and ease of service being demonstrated by Tesco. Up to 30% of consumers have shifted to completing their weekly or monthly shop in this manner and of course this leaves a gap in trading within the stores themselves. Online markets have long been increasing their share of consumer spending and in doing so reducing that of the more traditional route for shopping via company ‘high street’ stores. Of course this does not just effect supermarkets with many areas of the economy reporting increasing sells via the means of online resources. It will be interesting to see the next move to be made by Tesco but it does appear that perhaps the days of 24 hour shopping may soon be a thing of the past.
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Author: Internal Customer Services Agent