Tesco CEO Claims Supermarkets are a Force for Good

07/02/08 Tesco has reduced consumers’ shopping bills by 30 per cent in the decade since 1997 – about £4,954 per typical family - chief executive Sir Terry Leahy announced at the prestigious annual Professor Sir Roland Smith Lecture.

Sir Terry Leahy told business leaders and Government representatives that supermarkets are a force for good in society: they extend choice; promote healthy living; create jobs and are harnessing consumer power to deliver sustainable consumption.

Sir Terry said: ’I believe the consumer is a force for good in society, an engine for growth and sustainability’.

Releasing figures which quantify shoppers’ savings at Tesco for the first time, Sir Terry said making good, fresh food widely available not just to the affluent few was a mark of a progressive society. He said that in contrast to other household essentials, food prices have been held down.

‘Tesco has saved the typical household £4,954 on their shopping bills since 1997. Rail fares, petrol, the council tax, the TV licence fee – they’ve all gone up.

‘But we have been keeping the prices down. In tougher economic times, we’ll continue to do everything we can to save customers money. As we often say, “Every little helps”.’
He added: ‘Supermarkets have become a lever of social change, a source of social mobility. Not just in giving people more choice in what they buy, but in providing more jobs.

‘In the case of Tesco, we have created on average one new job every 20 minutes for the last 10 years. That’s more than 260,000 jobs created since 1997 – more than 126,000 of them in this country.

‘In some deprived areas, Tesco has been a hub for regeneration.’

The lecture, “A force for good in society: supermarkets and sustainable consumption" debated the role of supermarkets in society, the benefits they bring and how they can harness consumer power to address the key challenge of the future: climate change.

Sir Terry said: ‘The power of the consumer,gives us a lever to address one of the greatest challenges of our time: climate change.’

According to the agenda-setting Stern report on climate change, spending £1 today on energy-saving initiatives may save future generations £5-£20. But consumers have two mindsets. They want choice – a German beer or a European mini-break – but they also recognise the threat of climate change. Sir Terry argued that the two mindsets are not incompatible: consumers look to companies such as Tesco to remove barriers to ‘green’ behaviour, such as high prices or lack of information.

Sir Terry said: ’Sustainable consumption - the ability to consume while protecting the environment, not damaging it - is possible.

’But only if you understand that consumers – and suppliers of products and services – are part of the solution to climate change.’

Sir Terry, who graduated from UMIST, was taught and greatly influenced by the late Professor Sir Roland Smith . He described Sir Roland Smith as ‘a pioneer of marketing as a discipline in this country’ and spoke of his admiration of a man who ‘knew how to ask the right questions, and the importance of keeping things simple.’

He said Sir Roland would certainly have understood the power of consumers: ‘Our relationship with consumers is a vehicle to drive change. We can turn the green movement into a mass movement – not something out of reach to all but the affluent, or out of mind to all but the activists.’

He concluded the lecture by encouraging businesses and governments to put their trust in consumers.

‘Consumers fuel our economy, creating jobs, investment, tax revenue. If, like me, you believe that consumers want the best not just for themselves and their families, but also for the wider community, you will see why they are a force for good.

‘Supermarkets are their creation. We prosper and grow by delivering what they want. That is our role in society. Our success is a shared success, one that benefits all.’