From visceral business:

“It has been in Tesco’s business interest to hold onto a world view in which it has enjoyed market dominance, a world in which executives have believed it could bend consumers to its will, which has been in denial about the changing needs of the people it serves, people who no longer have time to drive out of town or do the weekly shop.

Today’s world is one where the idea of the out of town superstore is redundant, and where sales per square foot is an outmoded algorithm.”

Read more here:

http://visceralbusiness.com/on-the-comings-and-goings-of-a-trailblazer-why-the-tesco-story-contains-a-lesson-for-every-business/

“The core competencies that made Tesco a marketing juggernaut and analytics icon appear almost irrelevant to its unhappy narrative of erosion and decay. More than any other retailer of scale, Tesco had committed to customer research, analytics, and loyalty as its marketing and operational edge. … Tesco was digital before digital was cool. Tesco’s Clubcard loyalty program was launched under Leahy in 1995 and redefined both the company and the industry. As the Telegraph recently observed, “Tesco was transformed into the market leader in the UK—with more than 30pc market share—by being able to respond to the demands of its customers. …

”But the harsh numbers suggest that all this data, all this analytics, all the assiduous segmentation, customization and promotion have done little for Tesco’s domestic competitiveness since Leahy’s celebrated departure. As the Telegraph story further observed, “…judging by correspondence from Telegraph readers and disillusioned shoppers, one of the reasons that consumers are turning to [discounters] Aldi and Lidl is that they feel they are simple and free of gimmicks. Shoppers are questioning whether loyalty cards, such as Clubcard, are more helpful to the supermarket than they are to the shopper.”

http://blogs.hbr.org/2014/10/tescos-downfall-is-a-warning-to-data-driven-retailers/

“The problem for Tesco was that, where there was an alternative, its customers chose it, for all that it had a Teutonic tinge. Price was one consideration, but only one. In my experience, Aldi and Lidl offer a less frenetic atmosphere. A more limited selection saves you time. The stores, by and large, have clean shelves and clean lines. Prices are as marked; you do not need A-level maths to check on multiple “deals”. And they have not gone down the route of self-service tills.”

http://www.theguardian.com/commentisfree/2014/sep/24/tesco-aldi-lidl-britain-supermarkets

A couple of extracts: “”The reality is that the model of retailing for the last 60 years is no longer fit for the changing needs of consumers,” says one senior industry source. “The question is: what are you doing to adapt your space to the new economics?”

“There is a lot of experimentation going on, much of it led by Tesco. Philip Clarke, who was ousted as chief executive last week, was trying to reinvent its nearly 250 Extra shops, which can be as big as 120,000 sq ft, as shopping destinations. Tesco has been turning over space to food outlets such as Harris + Hoole, which it half owns, and Euphorium Bakeries, as well as to gyms and soft play centres. It has even let surplus car park space to vehicle hire firm Avis.”

And in the whistling-in-the-dark-to-keep-yourself-cheerful department, a supermarket boss who doesn’t realise the game has changed:

“But one supermarket chief reckons that big-box grocery could yet return to vogue once Britons’ spending power recovers: “As the economy swings back there could be a shift back in favour of them, because the economic model is best served by them. In big stores, prices are lower and choice is better. This is something the industry has to figure out, but it can’t carry on subsidising unprofitable channels [like online] forever. In that sense what Philip Clarke was doing was not a stupid strategy by any means.””

And good luck with that strategy…