Are Tesco set for more pain?

Tesco have issued a second profit warning, the share price has taken a hit and the new chide executive has cancelled his holiday to start a month early.

Are we seeing the fall if the retail giant?

I have made my feelings clear in this blog about Tesco's major failings in respect if their customers. They try to be all things to all men and end up doing none if it well. In the case of the profit warnings, I think that we are seeing stock market tactics and a chief executive that wants to lay a lot if the blame at his predecessors - "look at the mess I inherited" - before a turnaround that looks oh so much better when/if it happens.

We are still seeing it with the banks, where they report trading figures that don't add up to the performance. There are always hundred of millions of pounds put aside for potential future bad debts and misselling claims. For me, this is double accounting, as the bad debts and claims are accounted for in the present but don't happen until the future. At a certan point, the banks won't have these future potential losses to put in their balance sheet and presumably some of the money they have put aside will have to reappear for losses and claims that didn't materialise.

Things aren't always as accounts make then seem

Tesco's next step is to look at their operation and decide where they want to be experts, and where they want to step back from. Offering opticians, pharmacy, tech experts, cafés, mobile phones, etc on top of their wide-ranging food offering is diluting the quality of service and advice they can offer their customers.

Online and 'Click & Collect' can provide answers

Some services Tesco will want to be able to offer in every store, but some have a better foothold online, where the expertise can be pooled and not spread so thinly. Tesco had a functioning website and a reasonably good Click & Collect offering, so these can take the strain of the expertise, whilst try get back to basics in the areas they can lead on in store. Great customer service will never go out if fashion.

20% off Autumn fashion at Amazon

Tesco sales drop is about more than price

I'm just reading about Tesco's figures and the fact that their sales dropped by 3.1% over the last quarter - the biggest drop since records began in 1984.

My wife and I were in Tesco yesterday and the problems became more obvious to me as we sat in the café overlooking the store.

The problem is that they get nothing right

Now this isn't an anti-Tesco rant. It's true. Look at the facts-

• They don't do quality as well as Waitrose
• They don't advertise as well as M&S
• They don't do cheap as well as Aldi
• They don't do mobiles as well as Carphone Warehouse
• They don't do cafés as well as Costa
• They don't do toys as well as Smyths
• They don't do tech as well as, well anyone really

This adds up to a poor showing overall. The growth of Tesco has come from the "all under one roof" philosophy but this has come at a price to consumers. The reality of the philosophy is "all in one place, but only 60% as good as if you bought it elsewhere."  The idea of training staff up to be as good as their competitors in each field wpuld take a huge investment. The model of the department store, with market leaders delivering each sector, stands up better than Tesco's current plan.

It is my belief that consumers in the UK tolerate standards that would be unacceptable elsewhere in the World.  For example, I conduct mystery shopping programmes for some major restaurant chains and the question regarding food quality is "was the food rancid or spoiled in flavour?"  Now is this a standard we find acceptable?  In most European countries poor restaurants close because people won't pay good money for something below par.

It's the same with Tesco - customers are starting to find them out. Why pay higher prices for less-informed service on technology? Why buy their Finest range when, for a comparable price, you can buy M&S?

There is a bottom ground for discounters and there are already a few in the market. Why are Morrisons rushing for the lowest price ground? Why are analysts urging Tesco to join them?

A company that ploughed some of their vast profits back into a living wage for their staff, more staff available for customers and a higher standard of service would win every time.

Not everything can be bought on the High Street - MP3 version of The Hunting Party by Linkin Park on pre-order

Is it time for a major retailer to champion the High Street?

He question us rhetorical, but needs to be asked anyway.

In the light of Marks & Spencer's disappointing results today, does someone need to take a stand?

Is there a retailer out there that will say - "Actually we want to do our offline business solely on the High Steet."

Traditionally I would say that Wilkinsons, jewellers, the banks and bookmakers are High Street stalwarts.  Will one of these emerge from the pack and put their wholehearted support behind our town centre High Streets?

Let's have a positive mood to lead the market forward in saying we will protect our traditional High Streets and begin lobbying the government to do more to protect it.

Councils 'ignoring town centre policy'

The Association of Convenience Stores have said that since the "town centre first" policy was launched, 76% of approved floor space was out if town.  The policy was Government guidance to help keep our Hugh Streets vibrant and to consider the impact of planning decisions on town centres.  The Association claims that local councils are ignoring planning guidance.

The Government needs to go further than this if they want to maintain the vibrancy of town centre High Streets.

They should give cash to councils that make their High Street parking areas free for people that spend on the High Street. The cuts that central Government has made to local councils has forced them to charge for every service and try to make their own money in every way they can.  This affects people's choice of whether they go to the High Street, pay to park and always have an eye in the clock, concerned about a parking ticket. The contrast is out of town, free parking, plenty of time and often more choice.

To compete, High Street have to start with the parking issue.  If you provide free parking for those who spend a certain amount in the town, maybe get your parking attendants to be a little more human and sort out the staff parking situations then it will go a long way to redressing the amount of floor space approved in town centres, as shoppers and retailers will want to return.

Can the Government be radical on landlords with vacant shops?

It seems such a shame when there are rows of empty shops in certain Town Centres.  In my local Town Centre there is a shopping precinct and there is a string of shops with no tenants.  There is a relief on paying rates for the first 3 months - and I agree with this, as it can take a little time to find tenants and find the right tenants.

Where I propose that the Government push a little harder is after the 3 months have passed.  I suggest that business rates in empty shops go to 150% of what they are when occupied - what greater incentive would there be to ensure landlords find a tenant and keep our High Streets vibrant and full if choice.

Happier times on the High Street?