TESCO’S strategic review after its bombshell profits warning 14 months ago identified one of the supermarket giant’s problems as having stores that were often “industrial” and unwelcoming.
Chief executive Philip Clarke has been tarting up a lot of these in response. Recent developments suggest he doesn’t think refurbishment and extra shopfloor employees go far enough, however, and wants the stores cuddlier still for customers.
Tesco has paid more than £48 million for the Giraffe restaurant chain, popular with young mums, kids and those who believe calorie counts are for wimps. The deal may even help deflect attention away from the ongoing horsemeat scandal.
The idea is that Clarke will roll out the brand in chosen Tesco stores to make them family-friendly retail destinations.
It comes after Tesco recently bought a 49 per cent stake in the studiedly stylish Harris + Hoole coffee shop chain, which it also aims to open in its branches.
Clearly, the aim is to make a trip to Tesco more than a food-shop chore, but rather a social, eating, drinking, and chatting-over-the-organic-coffee experience, as well.
In short, imperial, hard-charging Tesco is looking for its inner humanity to try and transform those food retail aerodromes into something altogether more consumer-friendly.
And, in return, it must be said, perhaps restore the more hard-headed commercial edge it had for the decade leading up to its shock fall from market favour.
Pru’s up there with the best in mixed sector
The insurance results reporting season is proving a topsy-turvy ride. The upswing in sentiment provided by Prudential yesterday followed Aviva’s £3 billion loss and the bombshell of its massive dividend cut, which came at the same time as Standard Life’s £300m special dividend windfall on the back of bumper profits. RSA, meanwhile, has also tested investor loyalty with its divi reduction.
The Pru is obviously one of the sector winners, with a bigger-than-expected 16 per cent rise in the shareholder payment on a forecast-beating profits jump.
Dividends are serious business for the insurance sector. Insurers receive premiums and deposits before any withdrawals and policy terminations and so normally have the capital reserves to feed their strong income stock status.
But the latest reporting season shows each of the big insurers seems to be ploughing its own strategic furrow, be it moving into higher-margin pensions or trying to diversify from a UK bias towards emerging markets.
Prudential’s strength comes from its strong Asian presence, where helpful demographics and a relatively benign economic backcloth are insulating the group from the worst of the ravages of the eurozone.
Indeed, Prudential chief executive Tidjane Thiam has been frank in not ruling out a move of HQ to Asia from London, particularly if European Union insurance solvency rules disadvantage UK groups with big American operations.
The company’s 25 per cent jump in operating profits has cheered the market, leading to a jump in the shares yesterday.
It is also seeing strong cash generation in the UK and US to show it is not purely an Asian play. In a sector that has, in recent times, not exactly looked as safe as houses, the Pru is up with the frontrunners.