Tesco goes premium and robotic

British supermarket giant Tesco will venture into premium convenience stores, robots and plant-based food. These are just some of the priorities for future growth, according to the retailer.

Premium only at Tesco Finest

The British market leader is planning to open more small proximity and convenience stores. These include franchise concept One Stop, as well as the new concept Tesco Finest. Management believes there is room in the United Kingdom for 100 more One Stop outlets, in addition to of the 169 stores already there. It suggests a gradual move away from the chain’s image as a real “big box” retailer.

The Tesco Finest concept is entirely new; it is named after the premium private label that the chain has been using in all of its existing stores. The separate store concept should compete with the Simply Food concept rolled out by Marks & Spencer, and Little Waitrose. The stores will have room for catering, lots of fresh vegetables and fruit and a modern, light interior. Early simulation images even suggest a Tesco Finest wine bar, reports The Guardian.

The British market leader is looking to prioritise local food producers and plant-based meals – in particular, with the help of its own wholesaler Booker. The chain wants to put ten times more vegan prepared meals on offer, thanks to the launch of a new product line named Plant Chef. Currently, there are 32 vegan meals available, but in the future there will be 300.

Registerless shopping to save 75 million euros

Technology should allow for further growth as well: in the back of the stores, Tesco will install high-tech mini-repositories using robotics. The idea is to prepare online orders more quickly and efficiently. By the end of this year, at least one robot repository should be in use. There are also experiments with robots to take care of home deliveries and to check store inventories.

On the customer’s end, Tesco is investing in self-scan devices and a mobile app which should boost registerless shopping. The supermarket group hopes to save 68 million pounds (about 75 million euros) by making all self-scan transactions cash-free within two years. Within five years, all self-service payments will be done without using a register. 

Through these measures, Tesco intends to keep growing at a rate of about 3 to 4 %. For this year, the group also hopes to generate profit margins that are 3.4 to 4 % higher than predicted. Tesco is aiming for smaller stores abroad as well: 750 new, smaller stores will be opened in Thailand.

In its recent talk to investors, the group only remains unclear on the future of new discount chain Jack’s. The retailer did not mention any expansion, but did show a new version of the store concept, which should compete directly with discounters Aldi and Lidl. The newest store will be bigger and focus even more on bulk purchases.