Has Tesco's Results Pissed People Off?

As we venture deeper into the recession, this week supermarket giant Tesco released record profits of £2.95 billion pounds. You would have thought it would be great news to have a company performing so strongly despite the downturn with loads of money available to pass on to staff and suppliers! Well I think it has had the opposite effect. In these tough times with people struggling to make ends meet, is it best practice for Tesco to promote making more money than ever before? I think not.

Consumers like a good guy. For a long time Tesco has been that good guy, slashing prices to make our shopping budgets go that bit further. However their overwhelming size is now starting to have the opposite effect on consumers. Tesco have destroyed small local shops, a sense of community in some respects has been lost and word has got out that they've got a bad reputation for hanging suppliers by their balls too, which has another adverse effect on the community. A couple of these factors are starting to rub the wrong way for Tesco.

Jonathon Warburton, Chairman of baker Warburton's seems to agree. He spoke at the Manchester Business School earlier this week and he mentioned that he fears the size of his own business could turn customers against them as the family ethos it has created is lost and felt that the same was happening with Tesco. He also spoke about how he too was under constant pressure by Tesco to give them more money, in the past 6 months they've had 19 meetings alone.

Of course business is business. Tesco needs to please the shareholders, the whole company strives to hit targets and to increase sales results year on year, that's only natural. You can't help feeling that if the release had been cushioned with news of how Tesco was in the same boat as the consumer, that they were feeling our pain and they were doing everything they could to help, it wouldn't have been as bad. I think an important consideration is how the size of the business has lost it's contact with it's customer base.

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