TESCO LETŇANY REFIT Prague, Czech Republic

by Marek Krátký

Store improvement project, November 2014

This presentation shows a perfect execution of my cooperation (dunnhumby) with Tesco

© Marek Krátký

Key information

Letňany Shopping Park is located in the outshirts of Prague. has over 180 stores from Fashion, Electronics, Toys, Cinema and other areas.

Tesco store Letňany was built in 1999 and is inside a biggest shopping park in Prague and the Czech Republic.

Competition GLOBUS LIDL KAUFLAND INTERSPAR

Size after refit: 10k sqm Opening hours: non-stop 24H

Address: Veselská 663, Prague 9 © Marek Krátký

Background to the store

• Tesco Letňany hypermarket was continuously facing a footfall decline since 2009, which was even strenghtened during road constructions in 2011/2012.

• The hypermarket suffered from big size of 12.000 sqm.

• There was a road construction in main entrance in 2011-2012 which significantly decreased the footfall and frequency.

• Big hypermarkets in all Czech Republic are in a decline of interest for food shopping due to convenience and driving distance.

© Marek Krátký

Key issues in Tesco Letňany …

Low customer service

Boring / NO shopping experience

Clinical feel

No Focus, Mess on the shop floor and in the shelf

Discount look

© Marek Krátký

Key focus areas to boost the sales … my dh insights

Appealing shop-in-shop concept

Fresh looks really fresh

Sophisticated Category Management

Visible seasonal offer

Maximised shopping experience

© Marek Krátký

Excellent display of all Fresh Foods

My analysis showed that Tesco was losing sales in key destination categories like Fresh segment due to low quality and …

So: All fresh food was moved under one roof, in the same Fresh Area. This puts together meat, sausages, fruits, vegetable, bakery, milk categories, flowers and snack on the go close to each other.

Thanks to this, fresh looks really fresh, you can feel the vegetables, bakery. Nice display containers make the atmosphere of a market farmers place.

Fresh looks really fresh

© Marek Krátký

Modern & Strong brands drive sales up

My analysis showed that customers lack a point of differnce (POD), they miss „one more reason“ why to go to Tesco rather than …

So: Tesco introduced new brand Manufaktura, original Czech / local cosmetics. This is an entirely new brand line in Tesco as well as competitive Food Retailers. This is a similar concept like Tchibo in other supermarkets.

There is also a dedicated corner to world brands of L´Oreal looking like a design saloon. Same strategy is introduced in Electronics, Toys, and of course F&F fashion.

These shop-in-shop concepts drive you in, stimulate your emotions and offer you a new, pleasant shopping experience, where you feel like not in a hypermarket at all.

Appealing shop-in-shop concept

© Marek Krátký

Themed islands boost volume sales

My analysis showed that Tesco customers prefer experts rather than discounters …

So: By using dunnhumby data, Tesco has a very sophisticated category management knowledge. The data show how consumers buy different categories and where are connections. This stimulates to create islands, category worlds, like world of beer, vines and spirits; world of toys; world of babies.

This makes the shopping easier for consumers and increases the basket size of not only the individual brand, but also so called associated spend.

Sophisticated Category Management

© Marek Krátký

Special & seasonal offers close to cashiers and entrance

My analysis confirmed that seasonal offer drives footfall but requires a better display …

So: To make the most out of the seasons (X-mas, Easter), Tesco moved the entire offer between entrance and cashiers, very visible. Thanks to this, customers see the seasonal offer more than two times during the visit and are motivated to make the purchase.

Additionally, this makes the store more sexy, underlines the special atmosphere.

Visible seasonal offer

© Marek Krátký

Attractive displays and food tasting - shopping is a fun

My analysis showed that people miss the shopping experience in Tesco …

So: Tesco has significanly improved the shopping experience and satisfaction.

Buying fresh sausages, you can taste some new fresh products and you feel like at a butcher.

Wine shelfs are extended with „barrelled“ wine like in a wine cellar, which are currently very popular.

Similar concept is applied in electronics, toy and fashion area.

Maximised shopping experience

© Marek Krátký

To sum it up …

Listening to my dh insight driven by hard data, Tesco has made a big stepchange, a huge improvement from what I call clinical, boring store to exciting, great shopping experience Tesco has changed the shelf layout size and positioning, so it is not like in a warehouse. The creation of themed worlds has significantly improved the category management so every customer finds the right products faster, moce conveniently. There are more shopping assistants on the shop floor which helps you to get professional advice, helps you to make better decision, the goods is always well displayed and freshness of perishable goods is checked regularly. The overall change should motivate customers to return to the store, increase his frequnecy of shopping, and

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© Marek Krátký

How can I support your business …

Marek Krátký Experienced marketeer with more than

15 years of great school of business and life.

Currently independent consultant. Interim manager.

Experience from FMCG, Pharma and Retail - Procter&Gamble, Mars/Wrigley and dunnhumby/Tesco.

Specialisation in Strategic Marketing, Brand Building, ATL, BTL, Customer Insights, Big Data analysis, Loyalty schemes, Retail strategies, Sales strategies

Contact: brand-manager-services@seznam.cz

Mobile: +420-731 150 142

© Marek Krátký