A Review of the Tesco Fit for Growth Strategy

This summer Tesco announced its Fit for Growth strategy, having admitted they have fallen behind compared to other retailers on competitiveness. The reset has implications for brands and is something every brand should consider when working with Tesco. In this blog, we will delve into Tesco's Fit for Growth strategy.

Understanding the Fit for Growth Strategy

Tesco's Fit for Growth Strategy is a comprehensive approach aimed at achieving sustainable growth and profitability by focusing on three core principles: 1) End-to-end simplification, 2) Sustainable online growth, and 3) Range reset.

1. End-to-end simplification

The Fit for Growth strategy involves eliminating unnecessary bureaucracy, simplifying processes, and enhancing cross-functional collaboration. This includes reviewing the full supply chain from supplier to shelf.

2. Sustainable online structure

This has been hugely publicised in recent months as Tesco began to change the way they operated their online model. They state with the higher cost of fulfilment and price increases that the online structure needs to be reviewed and how suppliers fund this will change.

3. Range reset

Tesco will be looking at all elements of the range including optimising space, price, promotions and the range itself. Different categories will be focusing on specific areas that have been highlighted for improvement.

What does this mean for you?

As a brand, you need to be clear on your range and highlight the value of Tesco keeping the range amidst the streamlining of categories. You should also identify any of your products that are in the tail of the range and come up with strategies to improve or keep the space. You should also be reviewing your promotions and marketing investment to ensure this is effective and aligned to Tesco's priorities. Proactively engaging in performance discussions with your Buyer will be essential to winning in the range reviews.

If you are in the midst of Tesco negotiations or simply don't know where to start, reach out to Reframe to see how we can support you; hello@reframebrands.com