Tesco’s outgoing CEO, Dave Lewis, gave plenty of advice at the Festival of Marketing that agency group CEOs who are struggling to turn around their businesses could learn from.
Lewis described his approach as “brutal objectivity,” and you could tell he really meant it. “It’s the ability to stare right into the reality of what you have and understand why it is the way it is,” he said. “Most strategies fail because the quality of the analysis on which they are built is either subjective or incomplete.”
He may hate the ‘drastic Dave’ nickname (given to him when he was at Unilever by a headline writer at The Grocer) but he doesn’t seem to mind living up to it. In 2014 he faced into the reality that Tesco had “zero brand trust,” and drastic solutions were in order.
Tesco was losing money, but Lewis’ first move was to cut the prices of brand name goods by 15-20 per cent to put them in line with Aldi and Lidl, recruited 9,000 new colleagues to work in stores, and implemented a “massive restructure” of the management team.
He spent £350 million on introducing Farm Brands, which he described as “a big roll of the dice,” and invested in 14,000 formulation changes across every food category in Tesco.
Revamping the marketing came next, with BBH’s “Food Love Stories” campaign, and the final piece of the puzzle – the loyalty scheme— will be in place by the time Lewis leaves the supermarket early next year.
Tesco Clubcard, Lewis said, had been a promotional tool, not a loyalty tool. He lost count at 25 different registration points across grocery shopping, fuel, Tesco Mobile and Tesco Bank, so these are now being brought together into one digital, contactless experience.
Lewis’ only regret is that he didn’t do it all faster. “There’s a natural inertia when you are trying to change a business, but the clearer the objective, the shorter you can make the time span, the better the change. For me it’s all about speed.”
There was no mention of where he might turn up next, but Lewis, who is still smelling of roses after his five years at Tesco, did stress that he’s passionate about sustainability and the environment, which could be a hint.