Re-wiring..“.. the Business Model through Covid-19”

Dr. Sumit Mitra; CEO Tesco Business Services

Tesco at a glance.

440,000colleagues around

the world

6,809stores

3,400 in the UK

8 countries

1 JV

300,000 UK colleagues

90mnshopping trips

per week

£60bn sales

5 facts about Tesco Business Services.

Single service organisation for Tesco Group supporting Retail, Bank & Mobile 1

Execute 8 out of 10 Tesco Core process across 4 locations 2

Owns Tesco- wide capability for Continuous improvement & Digital transformation 3

70% of all finance processes & 100% store design globally is executed in TBS4

Sponsored by Group CEO & a key ingredient of Group strategy 5

Tesco during Covid 19

Huge demand

for online shopping

Panic Buying

• 52k colleagues absent at peak

• Up to 30% absence

Absence

• From 600k orders per week • 1.3m orders

On-line

• Removed multibuy promos

• Elderly Hour & NHS hour

Food for all

• Wide scale panic buying

• +35% LFL increase

5

We reacted very quickly.

Controlling to

empowering

Privacy to transparenc

y

Planning to experimentati

on

• Every decision was based on customer impact

• Elimination of waste

• Hierarchies to networks

• Focus on volume & utilisation

• Focus on colleague through “pulse survey”

Profit to purpose

• Remote working infrastructure for 5500 colleagues

• People policies launched to support

colleagues

6

Tesco Brand Index continues positive trajectory, consistently ahead of our competitors.

Source: YouGov, 1 week roll – Competitor Average consists of Big 3, Aldi, Lidl, Waitrose, M&S and Co-op

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202001 202002 202003 202004 202005 202006 202007

22.0

24.0

26.0

28.0

30.0

32.0

34.0

YouGov Brand Index- 1 Week Roll

Tesco Big 3 Competitor Average

Government formally advise working from

home

Government ‘lock down’

announcement

Tesco announce £30m package of

community support

Introduction of product limits & priority shopping

hours

Introduction of social distancing measures & Adv

5 steps to re-wire business services to create value.

Theme 1: A seat on the table.

‘Connecting to the purpose’

‘Executing the purpose’

Theme 2: Having the right ingredients.

‘Clear strategy & direction’

‘data is new oil’

Walking Dead

Spectators Players

Cynics

Theme 3: Creating the right culture.

EmpathyAgile

Inclusive

Energy

Att

itu

de

+

+

-

Theme 4: Building stakeholder and board advocacy.

Brilliantbasics

Managedperception

Emotional

engagement

Build engagement

• Authentic “value add” to the P&L = 3 X value

• Export talent for the future/ Net new-skills

• Create end customer value

Manage customer perceptions

• Manage experiences of service not just service

Brilliant basics: do the ‘job’ what you are there to do

• Meet ‘hygiene’ SLA requirements

Build positive advocacy

Eliminate

detractors

+61

Step 5: From reports to cockpit.

Value

Part

ners

hip

Pockets of opportunity – looking at past and predicting the

future

Accurate

Reliable

Partner

Data Information

Anticipation

Decision Cockpits

Dashboards

Reports

Visualized Historic KPIs

Fact File

Bringing it all together at Tesco.

2.0 Develop Propositions and Communication for Customers

3.0 Buy and Manage Product for Customers

4.0 Fulfil Products to Customers

5.0 Serve Products to Customers

6.0 Deliver Financial Accounting

7.0 Manage Colleague Experience

8.0 Buy and Manage GSNFR

9.0 Manage Property Lifecycle

8 SERVICE MODEL PROCESSES

Top Line Growth

Bottom Line Growth

Cash Generation

Customer Satisfaction

Supplier Satisfaction

Colleague Experience

ENABLING VALUE CREATION

Value Multiplier

Organisation

A single integrated global organisation focused on creating a ‘one office’ organisation where Business Services connects back office operations to the customer

Value stream

Drive end to end process simplification and cross-functional value to customers, stakeholders and colleagues

A

B

Digitalisation

Cognitive technology to automate tasks and augment decision making

C

3 TRANSFORMATION STEPS

ROI

UK

CE

Asia

Thank YouFor Your Attention

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