Tesco – CSR and community partnership

Business objectives:

Tesco's strategy is for long term growth and focuses on the four strands outlined above.  It has a “Core Purpose” of “creating value for customers, to earn their lifetime loyalty”.  The company is built on two strong values “which drive the way we do business”:

1. No one tries harder for customers
2. Treat people how we like to be treated

Regeneration and social inclusion insights

Tesco's website states that “Tesco is committed to conducting business in an ethically and socially responsible manner”.  Tesco has a commitment to be a good citizen “acting responsibly wherever we operate” and this translates into a Code of Conduct for Suppliers, a Code of Ethics for staff, a commitment to protecting the environment, using commercial strength to put principles into practice and a commitment to playing a positive role in community. (Tesco website).

It is on the latter that this profile will focus – reviewing Tesco’s work on regeneration partnerships through its Seacroft development.

In developing its regeneration strategy, Tesco looked at the social inclusion agenda and its own property programme and identified what it believed would be a win/win for communities, customers and their business.  From this strategy, the following highlights have been achieved:

• 6 regeneration partnerships opened (in deprived areas that a major multiple would not normally look to invest in)
• 2,200 new jobs created
• 1,300 of these employed through the jobs guarantee, many previously long-term unemployed people
• 7 other partnerships announced which will create another 6,600 jobs

The Seacroft store was Tesco’s first regeneration partnership.  In 1998 the Seacroft area, while being only 4-5 miles away from the vibrant regenerated heart of Leeds, was ranked the 388th most deprived ward out of the 8,414 English wards.  17% of its adult population claimed Income Support compared to an average of 8% across the UK.  Tesco’s aims for the project were to:

• Develop a profitable business model in communities characterised by social and economic deprivation
• To solve local skill shortages by developing a unique jobs and training guarantee particularly applicable to the long-term unemployed
• To engage with community partners so as to foster a sense of community and shared ownership for regeneration.

As the name implies, Tesco’s Regeneration Partnerships required that the company develop new networks and new ways of doing business to deliver its projects.  While the company already had good relationships with many of the partners who helped it to deliver the scheme, the project has strengthened these relationships and enabled Tesco to build new ones. 

Partners included the Local Authority, training providers, JobCentrePlus, Trade Union (USDAW), community associations, and other employers.  Internally a cross-company approach was required, drawing on expertise from many departments, ranging from Property to Human Resources to Corporate Affairs.

When the store opened in November 2000 over 240 previously unemployed people – many who had been out of work for more than two years – formed a 'key part' of Tesco’s trained staff. 

The business benefits

Tesco is confident that its success shows that businesses can benefit by reaching out to communities and developing new customers.  The key benefits for Tesco of its regeneration partnerships are:

• Commercial sustainability
• Developing effective staff teams
• Developing a safe and attractive environment for customers to earn their loyalty
• Contributing to a clear sense of community

What the experts say

“Tesco shows an average sustainability performance in its industry group. Tesco’s management capabilities in the economic dimension are average in comparison to its industry. In the environmental dimension, Tesco scored more or less equal to the industry average. Moreover in the social dimension, Tesco performance was in the range of the industry average.” (Dow Jones Sustainability Index)

Article 13 criteria for selection:

Innovative work through partnerships to regenerate deprived areas in the UK

Business Insights

Turnover: £28,613m (2003)

Core Service: Retail

Profile: Tesco is a leading retailer, operating 2,291 stores around the world and employing 296,000 people.  It has grown from a purely UK operation, developing international markets in Ireland, Central Europe and Asia.  There are four strands to Tesco’s strategy: core UK business, non-food, retailing services (personal finance and online grocery sales) and international. 

Sources:

• Company website
• Interview with Jonathan Refoy, Corporate Affairs Manager
• Tesco CSR Review 2001/2002
• Tesco Regeneration Partnerships “the story so far…” 

Also in this feature:

• Centro - innovative engagement in the regeneration and social inclusion agenda 
• Local Strategic Partnerships 

© Article 13 2003