Saturday, September 06, 2008

The Tesco Story - A little help from online friends needed

I came across a video about Tesco that has been viewed a million times. Even for the biggest retailer in the country that is a bit excessive and all the more so because it was an activist video.

I just had to dig further.

On June 29th 2008, David Smith and Zoe Wood reported on the Annual General Meeting of Tesco. Tesco, like all big, successful companies has its detractors. At the time, the company accounted for £1 of every £7 spent at British shops, was facing the effects of recession, high input costs and resurgent competitors.

Tesco is the fourth most visited retail site in the UK, it had 32 million web page impressions claiming some form of allegiance and its sites,, (which had lost the link to the financial consultancy Investis) and where its press releases and CSR policy statements are published.

According to David Bowen in an FT article in May 2006: "The web is even more important than newsreaders in the area of social responsibility. Whether a company is trying to provide data on waste, to explain how friendly it is to the community, or to lay out its policy on child labour, it cannot do so in sound bites – it needs space, and a website has more space than any other channel.

"Tesco and Sainsbury both understand this, though having looked at their sites I fear they may also believe CSR is a sub-division of marketing. What surprised me more than this is the variation, and in places lack of interest, I found as I wandered round other giant retailers’ websites."

But in June 2008 the message had not gone home. Contributing to the Boards woes were a number of issue campaigners:
  • The celebrity chef Hugh Fearnley-Whittingstall campaigning for higher-welfare chickens in Tesco stores; 
  • Jim McLaughlin, president of the United Food and Commercial Workers Union (UFCW) in Arizona, told shareholders and the board that 'We are here to inquire why there has been no dialogue in the US, whereas in the UK it is an established practice for Tesco to engage with unions; 
  • The anti-poverty charity War on Want alleged that Tesco is being supplied by an Indian factory where textile workers struggle to survive on less than £1.50 a day and a 60-hour week; 
  • Activists had, according to Smith and Wood, also accused Tesco of bringing tons of produce to Britain from crisis-torn Zimbabwe 
  • The company, it was reported, had become the shorthand villain of the piece for campaigners who blame supermarkets for driving local businesses out of towns and villages.

Robert Clark, an analyst at Retail Knowledge Bank was reported to likening the situation to the mid-Nineties, when Sainsbury's was the market leader but lost its crown after it was seen to become arrogant and lose touch with shoppers - an environment that enabled Tesco to expand rapidly.

Both sides of the arguments appear in social media like blogs, discussion lists and videos and there were those million YouTube views.... surely that MUST be ringing bells!

The remarkable evidence is that there is a debate and yet there is no evidence of Tesco interacting with the communities engaging in the issues. No press release, no comments in blogs, or video sites. Silence!

That month its shares fell to their lowest level for two months after a trading update showed growth half that enjoyed by rival Morrisons. Tesco also admitted that Asda and discount outlets such as Aldi were 'having a moment in the sun' in the tougher economic climate. The moment in the sun extended month after month.

In August 2008 the biggest private sector employer was concerned about the effects of negative press coverage on staff and hired the Wriglesworth Consultancy following a five-way pitch.

Then PR Week announced in September that Trevor Datson Tesco's head of corporate media relations had "jumped ship" to join Danone as external communications director in the UK.

Is there cause and effect?

Could there be a case for deeper engagement? Could this be achieved without the Board's fundamental approval and involvement?

Are we watching a case study on how not to handle social media in the making?