Tesco boss unveils a brand new vision

By Rupert Steiner for the Daily Mail
Updated: 02:48 EDT, 11 May 2011

Tesco boss Philip Clarke has announced plans to develop a raft of new brands to re-invigorate tired product ranges as part of a major strategic initiative.

Ambitious: New chief Phillip Clarke is outlining his plans to 5,000 Tesco managers from around the world

The fledgling chief executive, who replaced Sir Terry Leahy in March, also has ambitions to push the business online in all 15 of its markets by the end of 2020.

Clarke, outlining his vision for Tesco in a memo to senior staff, also pledged to grow the UK operation having admitted recently the home market, which accounts for the lion's share of both sales and profits, is in need of more attention.

He stepped out of the shadows of his predecessor with a roadshow presenting his new vision to 5,000 managers in 21 meetings across the world over the next 12 weeks.

Clarke was careful, when drawing up his seven point plan, not to deviate too much from the five points developed by Leahy.

Tesco's strategic target to be 'an international retailer' was updated to 'be an outstanding international retailer in stores and online,' with retail services now targeted in 'all markets'.

Nick Coulter, an analyst at Nomura, said: 'The new strategy encompasses all of the former planks, but necessarily reflects the passage of time, growth and the challenging nature of the global consumer.'

The most significant addition is 'to be a creator of highly valued brands' which is being seen as an attempt to inject new life into what some have described as Tesco's uninspiring clothing ranges, as well as other non-food products.

Tesco (up 7.2p to 411.3p) has had mixed success with clothing line F+F and faces stiff competition from Sainsbury's more upmarket TU offering and Asda's George.

Clarke said the new brands related to food which includes its Value and Finest lines, as well as developing new brands for shoppers who do not necessarily want to have the name of their grocer plastered across all their the purchases.

He was reported as saying: 'As people develop their higher levels of disposable income, they want to treat themselves.

'They do not want to just buy Tesco Value shower gel. They want to have something sat in their bathroom that looks like it is a brand. So you create brands.'

He said he would work to expand F+F and Tesco's Technika electricals brand, and create new ones in other product areas like Go Cook in kitchenware and Lighter Choices in health foods.

The move will be a blow to consumer goods giants Unilever and Reckitt Benckiser.