Tesco’s Suppliers Facing Another Major Range Review

 Namnews, 24th May 2023

Tesco is reportedly planning a major review of its entire food and non-food range under a new reset programme called ‘Fit for Purpose’.

According to trade publication The Grocer, it will be the biggest overhaul in the supermarket’s product lineup since the ‘Project Reset’ cull under previous CEO Dave Lewis, which began in 2015 and set out to streamline Tesco’s range by up to 30%.

However, instead of setting a target for a reduction in the number of SKUs, the new reset is said to be a “macro level” review of Tesco’s entire store layout. Beginning in September, it is expected to result in major changes to stores in the second half of the company’s financial year.

A source quoted by The Grocer said: “The difference between this and Project Reset is they indicated it’s more of a macro level range review, and so in its own way it could be even bigger.

“Whereas Project Reset was about setting a target for reduction of SKUs, this is Tesco looking across the whole store and saying where do we dial things up and where do we have to dial things down.

“It’s going to have pretty huge implications for suppliers.”

Details of the review were revealed at the Business Update supplier event hosted by the IGD earlier this month.

The retailer is said to have told suppliers it wanted the review to achieve “transformational change” as well as a simpler supply chain.

The Grocer’s source added: “Tesco said this will start in September but I would have thought they will get Christmas out of the way before it lands. Then we are likely to see some pretty big changes to stores.”

The source suggested that fresh categories were likely to get the bulk of the investment, with ambient suppliers potentially taking a hit as a result. “There will be winners and losers across the board,” they said.

Ged Futter, founder of consultancy The Retail Mind, told The Grocer that he believed the range review and Tesco’s recent introduction of online fulfilment fees were both aimed at the same thing.

“Tesco has clearly identified a gap in its profit forecasts, and it intends to fill it, whether that is with fulfilment fees or Fit for Purpose,” he said.

However, Futter noted that Tesco would struggle to achieve a full store reset in a period of six months. “The changes they are talking about are not something you can achieve in a few months,” he said. “Suppliers have been told that this is going to be bigger than Project Reset and that took years.”