I think that I’ve been in Tesco stores in seven or eight markets now, including two of their less successful ventures in the USA and France, and at the weekend I had the chance to explore one of those markets – the Czech Republic – a little more thoroughly. The last time I was there was on a brief holiday trip and I distinctly recall quite punitive sanctions being threatened if I insisted on any unnecessary supermarket visits.

This time, however, I was free to maraud around stores at my leisure and one that I was keen to get to was Tesco Extra. I’ve not been to one in CEE for several years and was keen to see if there had been any notable changes.

The answer to that musing is a bit of yes and no. There have been some distinct improvements in some aspects of ranging, store design and merchandising but I got the sense that the store I happened to visit was simply too big.

Tesco has been proactively downsizing many of its stores in CEE by chopping off an end and giving it over to Sports Direct or H&M for example, but this outlet was colossal and was clearly lacking in terms of footfall. Indeed, competitors like Albert in the Czech market are lopping off something in the order of 20 – 30% of space in their larger hypermarkets and the stores I visited that have been through this process feel much busier and homelier as a result.

Fair enough, this was Monday lunchtime and therefore not exactly ticking over at anything like peak trading, but my sense of loneliness and deepening agoraphobia suggested that the economics of this store (which trades 24 hours per day) must be something like a little challenging. This was highlighted by the fact that the previous store I visited, Lidl’s EDLP sibling Kaufland, was doing much brisker business.

That said, there were some very pleasing aspects to this Tesco store. The fixtures in produce and bakery – particularly the mobile trolley efforts – were thoroughly likeable and the homewares department was very well done, with plenty of F+F home products comprising a logical and pleasing adjunct to the F+F fashion section. From recollection, it was the work on F+F in CEE that led the way for Tesco global, with plenty of the fixtures, design and branding finding its way from stores like this back to the mothership in the UK.

Throughout, there were plenty of calls to action via highly visible promotional ends, their bright yellow hue, massive AKCE banners and delightfully retro ‘scissors going through currency’ motifs very eye-catching indeed. Private label was deployed well throughout the store, Finest especially well highlighted through strong graphics and dedicated fixtures.

I enjoyed the confectionery department, where suppliers have, at a cost presumably, been enabled to install some frankly awesome end-caps with all sorts of bells and whistles like neon lighting and video screens. Probably bad news for parents with kids, but from an instore marketing viewpoint, lovely stuff.

Fresh counters were well designed and housed a great variety within them, set off by some nice freestanding wine displays alongside. Again, though, the counters were very quiet and – combined with the defensive merchandising in several chiller cabinets (like huge pack sizes of water) – suggested that supply is quite possibly exceeding demand in a store of this size.

Despite these potentially disappointing commercial observations, the fabric of the store itself was largely flawless and the merchandising within it was excellent. However, the level of competition in the Czech market is brutal and there is no shortage of choice in the bigger cities. Perhaps to prosper, Tesco might have to come up with more radical approaches and start thinking outside of the (bigger) box.

Bryan Roberts, Global Insight Director

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