Tesco’s new hypermarket design – our first impressions

Date : 08 August 2013

Ahead of Tesco's official launch of its new destination format Extra store in Watford on Monday 12 August, we've been in-store for an early look at the new hypermarket format.

High profile launch combining 18 months of hard work

This is a high profile relaunch for Tesco as it looks to re-invigorate growth in its largest hypermarket stores. When we passed by, there was a lots of activity in-store, with Group CEO Philip Clarke, Managing Director for Extra Tony Hoggett, plus a number of other senior personnel and property executives on hand to oversee progress. In a number of ways the new store format brings together under one roof, a lot of the work Tesco has done over the last 18 months to 'build a better Tesco' in the UK. 

New layout and revamped ranges highlight food credentials

The biggest change to the layout of the store is that it takes on board Tesco's new food first policy. All the food has been brought to the front of the store, with fresh produce taking up more space and positioned on a dedicated tiled area, with low lying units creating clearer sightlines. Counters are centrally located at the front in an island formation, with the offer having been upweighted, with a greater selection of food-to-go and food-for-later solutions, such as hot pies, pizza and a new City Kitchen concept. The range of fresh and chilled food, especially across Tesco's revamped ready meal range, is impressive and delivers wide reaching choice for shoppers.

New innovations under one roof for the first time

The new format utilises Tesco's newly acquired and partner businesses to great effect, all under one roof for the first time. Bakery has been brought to the front of the store, fronted by Euphorium Bakery and its new 'The Bakery Project' concept. A greater focus has been put on artisan breads, bakery classics, products of the month / day and staff walking the shop floor offering sample tasters, all creating a lot more theatre around the department and front of store in general. The Giraffe restaurant, which occupies its own area at the front of the store, appeared very busy around the lunchtime period and is complemented well by the new Harris + Hoole coffee shop-in-shop feature.

Significant step changes to non-food ranges and execution

General merchandise, clothing and health & beauty are positioned along the back of the store, with F&F a major step change in our view. Located in the back corner of the store, the clothing concession has a high street fashion look and feel, with an area that feels completely separate from the rest of the shop. General merchandise is also a big departure from a traditional Tesco Extra. New seasonal ranges are attractively displayed on multiple fixtures and  fittings, allowing greater dwell time and more of a department store ambience. Health & Beauty builds more subtly on learnings from Dudley and Woolwich Extra, plus concepts first seen in the Bishop Stortford superstore.

Sacrificing operational efficiency for a better shopper experience

The overarching impression as we walked the store is that the concept achieves its purpose of delivering a stronger leisure destination, with improved in-store ambience, more relevant ranges and greater personality. The trial pushes the Extra format away from one that is overly oriented around being operationally effective, to one that creates more excitement for the shopper. Throughout something that stands out is that cross merchandising is maximised for shopper ease, with lemons and limes in BWS, a dips fridge in the crisps aisle and salad dressings and other condiments located around fresh food. Although this creates greater complexity in restocking shelves, it works to create a more personal understanding as to what customers want. This is one of the areas where Tesco will have to ask itself whether it is willing to roll such initiatives out more widely. The use of digital technology such as an endless aisle screen in the toys department and a Blinkbox pod in the impulse aisle, displays Tesco's wider ranges and digital services, and in fixture features, such as digital screens in champagne and an ipad to help customers choose their malt whisky in BWS, also create nice touches.

Trial stores not the answer but part of the answer

Time will tell whether we see a wider roll out of the features at Watford, but it marks a significant change in direction as to what the retailer's largest stores may look like going forward. Commenting on the developments to The Grocer, Tesco MD for Extra, Tony Hoggett, said, 'This isn't the answer - it is part of the answer. It's a test of many propositions under one roof. The revamp of Watford and other trial stores that will launch in the next week in Coventry and Purley are all part of the initial £1bn allocated by Tesco for its store refurbishment programme. They aren't one off gimmicks; they are all things that are absolutely scalable but we are also ensuring they are also affordable.'

Watch our director of retail insight Nick Everitt giving his analysis on how hypers are adjusting to changing shopper tastes on BBC News here.

New store supports the Tesco Way of Life marketing campaign

Tesco’s chief marketing officer Matt Atkinson says, “Our stores should be the hubs of the communities they serve. That means providing friendly personal service to those who shop with us, and great counters offering genuine retail theatre”. This store appears to deliver, but it remains to be seen whether this reinvention can change shopper habits and ‘jump-start’ Tesco hypermarket growth.

Atkinson will be presenting on behalf of Tesco at the IGD Convention in October, where our industry leaders will discuss how they’re working to ‘power the industry’… More >>

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Don’t miss the Tesco Trade Briefing 2014, taking place on 30 April at Wembley, to hear the latest trading update and development plans from UK managing director Chris Bush and the senior executive team...More >>

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