Video transcript: Q3 and Christmas Sales Colleague ... - Our Tesco


Video transcript: Q3 and Christmas Sales Colleague...

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Video transcript: Q3 and Christmas Sales Colleague Video Dave Lewis, Group CEO Alan Stewart, Chief Financial Officer Matt Davies, CEO UK and ROI Trevor Masters, International CEO Dave Good morning everybody, and welcome to the Christmas and Q3 trading update. What we are going to try and do in this short video is give you an insight into the results that we're announcing today, and normally I ask a colleague from around the business to come and ask Alan and myself some questions, but today I get to ask the questions myself. I'm joined by Matt, Trevor and Alan and I'm going to ask them some questions on your behalf. So Alan, I'm going to start with you, this is a strong set of results that we're announcing today but for colleagues who are watching, what are the three key things that they should take out of these results? Alan The real take outs that I would have are that customer transactions are up, volumes are up, and our likefor-like is up and those are strong results, certainly when we look at others in the market, they are good results. Dave Matt, your first Christmas in Tesco, congratulations on a very good set of results, what has been the most impactful thing for you, your first Christmas here? Matt For me I've just loved going around Stores, Distribution Centres, Customer Engagement Centres, the Support Offices and just feeling the vibe right across the business. I felt we were in a really good place and I was progressively more and more confident as you go around and you feel the atmosphere and you talk to colleagues and you talk to customers and all that has come through in the results that we're talking about today. Dave Yes, I agree. Not your first Christmas in Tesco Trevor, you've got a few, but you have got a situation in International which is actually not just this quarter as a successful quarter, but two or three quarters of improved performance, so how are you and the team managing to do that? Trevor Well, I think in Asia they've done some good work in terms of identifying what really matters to the customer and it does revolve really around food, and they've done a good job in finding out what really matters and investing in that, and although it started slow in quarter one, in quarter two and quarter three we've really seen the impact of customers – new customers and existing customers – spending more and really making a difference.

In Central Europe which started on the program of One Europe, we can see the economies of scale coming through and I think Dave and the team have done a really good job investing again in what really matters to the customer. Dave You talk about transformation in Central Europe - that's a program that you and the guys have kicked off during the course of this year, how is that going? Trevor I think the first bit was just trying to settle, so we worked out the ways of working four countries into one, and I think we've done a good job on that, still a little bit more to do. Now we're looking at the transformational stuff, the stuff that's really going to make a difference, for not just this year and next year but the next three or four years. Dave I think travelling around the business as I do and I know we do, the thing that's on colleagues' minds is obviously the market and the share price. Nobody can predict what the share price is going to be but what would you say to colleagues who asked a question about why the share price is where it is before they see the results today? Alan I think on a macro level around the whole world there is a lot of uncertainty about the global economy, about growth. The year has started with significant market uncertainty around China and so there's general weakness in the share price. There's still concern over whether we going to make it as a sector in the UK, and then specific to Tesco but what I'm very clear on is that if we do what we set out to, if we achieve what we've shown today we can achieve, and we do that sustainably, I'm quite sure that the share price will reflect the business results over time. Dave I know there are two questions that are particularly on the minds of colleagues in the UK and they are around pensions and where we are with the pay review, so Alan, where are we on pensions? Alan We opened up the new scheme in the beginning of December and certainly when you and I went around with Matt and the team pre-Christmas, from Aberdeen to Newcastle to the Isle of Wight, one of the consistent feedbacks I got was actually people recognise the change, they're sitting and will probably start looking at contribution levels. You're now getting to January/February, and I think that's the right thing to do, so really thinking about how much I'm going to be saving now for my retirement through the new arrangements and I'd really encourage everybody to look at that and to think about it. Dave I think that's right, and now is the time, isn't it, in that sense. The other issue, Matt, that's out there and it's particularly a UK issue, is there's a lot of comment about the living wage, what have we got to say to colleagues about where we are on the pay negotiation process? Matt There were some tough calls to be made as we set about restoring the competitiveness of the UK and one of those calls was holding pay flat. Now we're in a good position in terms of having agreed a route

forward with the unions representing Tesco colleagues and we're looking forward to sharing that with colleagues over the next few weeks, but the big thing for me is knowing that we will continue to be a top quartile payer across retail in particular. And when I look at living wage and you look at the totality of the package that we offer we'll be well, well ahead, but it's really important to focus on the totality of the package and the powerful benefits that come with being part of the Tesco family, because they're worth an awful lot. Dave Yes indeed, and as you say the communication of that over the next few weeks and months is important. So the last question for the two of you actually, based on the strong performance in Q3 and Christmas, what message do you have for colleagues given that we've got six weeks left of this year, and the plans for next year? Trevor I think certainly for Asia, Chinese New Year is the big time for Asia, Thailand and Malaysia so good luck with the planning and I know they've got some good plans and they're really optimistic. In Central Europe we had a good Christmas, we're hoping for a good end to the year, it looks very promising since Christmas in terms of their like-for-like, and obviously Turkey again had a good Christmas and New Year, and they've also got some big trading times coming up so good luck with the plans on that. Dave Fantastic, and what about the UK and Ireland Matt? Matt I'm absolutely delighted with performance across the UK and Ireland that we're reporting on today. For me now it's a question of staying really focused, we're pursuing the right strategy, we're doing the right things and all coming together to serve Britain's shoppers a little better every day, so more of the same, that's my message. Dave Very clear. There you have it: a combination of lower prices on things that matter most to customers at Christmas, coupled with an outstanding range and an absolutely unbelievable operational efficiency which has led to an improvement in customer service is what underpins everything that the guys have been talking about. It just leaves me to say thank you very much for the energy, the commitment and the passion of all colleagues around the business, you've done a fantastic job through the year but particularly in Q3 and the Christmas period. The final thing for me to say is it leads to two things: one is today is the first time for more than four years that will announce as a Group a positive like-for-like so that should be something that we're all very proud of, and you'll also see in the announcement that it also means at a Group level the Big 6 continues to be all green, with six weeks to go, so everything to play for, but as the guys say, keep doing what you're doing because it's clearly working. Thank you very much. Ends