Tesco used its latest business update to set out its priorities for the next 12 months.
The event, at Alexandra Palace, hosted by IGD, saw over 1,300 representatives from brands and suppliers hear Tesco’s senior leadership team set out the retailer’s priorities.
Refining a winning model
Tesco didn’t announce any surprises for the year ahead; instead, given its strong performance over the past year, one of the key messages conveyed was a continuation of the strategies that have served the retailer so well.
Despite the familiarity of the messaging, Tesco’s Chief Commercial Officer, Ashwin Prasad, cautioned against competitors underestimating Tesco’s ambition.
Prasad said that Tesco’s strong performance was driven by being competitive and, with the current fragile state of shopper confidence, its aim was to provide shoppers the best possible value for every possible food mission.
Prasad listed Tesco’s priorities for its 2025/26 financial year as:
- Driving further volume growth and gain market share. Tesco’s ultimate ambition is to reach a 30% share of the market, based on Kantar data
- Connecting the Tesco ecosystem. This will be achieved through greater use of the Tesco Media & insight Platform, helping brands to better understand the journey shoppers take through Tesco’s ecosystem across physical and digital touchpoints
- Evolving Tesco’s supplier strategy for long-term competitive advantage. It will achieve this through deeper partnerships and scaling the way Tesco works across all its strategic partnerships
Although its strategic pillars remain unchanged, Tesco highlighted existing elements it would be dialling up in the months ahead.
The place to build brands
Tesco’s ambition is to outperform the market for brand growth, becoming the retailer of choice for suppliers to develop and grow their brands.
It will do this through its enhanced retail media offer and the wealth of shopper data available through Tesco Clubcard. Tesco told suppliers it will drive brand growth by finding new shoppers and converting them into repeat purchasers.
Building on this, Tesco’s appeal to suppliers was to make the retailer the first choice for launching new products, to generate shopper excitement about returning to the retailer.
Greater personalisation capabilities coming in 2025
The second half of Tesco’s financial year will see improved personalisation coming to shoppers. The retailer will provide shoppers with personalised, omnichannel journeys, that are triggered in real time.
As an example, Tesco will be able to identify shoppers making baby care purchases as potentially needing the items quickly. This group will be prompted to use the retailer’s quick commerce service, Whoosh.
In another example, Tesco said shoppers activating branded coupons in its app will immediately trigger follow-up notifications providing relevant recipe suggestions.
For suppliers, Tesco claimed the process for campaign delivery and testing would become quicker and simpler, reducing it, in some instances, from weeks to seconds.
Renewed focus on health
Tesco is renewing its focus on health, citing shopper concerns returning to the highs seen during Covid-19.
Tesco’s ambition is to be the UK’s one-stop shop for affordable, easy to access, good quality health and wellness products and services.
It will achieve this in three ways.
First, Tesco will be number one for helping shoppers lead healthier lives by stocking healthy food.
Secondly, the retailer will become the preferred pharmacy for primary care in the UK, growing its share in health and wellness. Building on this point, Tesco revealed that if current trials of health & wellness zones are successful, they will be rolled out to every store with a pharmacy.
The final element will be delivering complimentary services delivered by trusted partners.
Building on the theme of personalisation, Tesco aims to combine these elements to make “healthy” easy by personalising for shoppers’ individual health goals.
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