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quarterly issue 2

Adapting to COVID-19: the Tesco story

Author: ICAEW Insights

Published: 17 Jul 2020

tesco header

Alan Stewart from Tesco explains how his organisation’s business model responded to the challenge of COVID-19.

“A challenge like no other” is how Alan Stewart, Chief Financial Officer of Tesco, describes COVID-19. “Our business probably changed more in the couple of months following the outbreak than in the whole of the last 10 years,” Stewart says. “The pressure was felt across all our teams and I’m so proud of the way our colleagues have responded so quickly and selflessly to put our customers first.”

Tesco’s finance team played a critical role in the company’s immediate response to the crisis, working with colleagues to support the rapid implementation of vast operational changes. The business more than doubled its capacity for online grocery shopping – in April, it became the first UK retailer to fulfil one million online grocery orders in a week.

At the peak of the crisis, Tesco recruited almost 50,000 new temporary staff to support its workforce already on the shop floor, in distribution centres and working as delivery drivers. It wasn’t just behind the scenes that Tesco’s finance team was making a difference, however. Team members also took to the shop floor.

“Every Christmas, we ask colleagues from the office to support with store shifts at a time of increased customer demand,” explains Stewart. “In the initial few weeks of the COVID-19 crisis, we again asked and the response was fantastic, with so many colleagues in finance and across all teams ready and willing to help out where the pressure was greatest. I’m sure we’ll do more of this in future,” he says.

Like many around the country, one important change that the finance team made in the early days of the crisis was a shift to remote working. The transition went smoothly, largely because the organisation’s culture was already supportive of the practice. “In the finance team, we take a very open approach to flexible working to promote a better work-life balance,” says Stewart. “This meant we were already well versed in the technology for remote working and our colleagues have been able to collaborate seamlessly.”

Reflecting on one notable change, he goes on: “The key lesson has been ensuring we communicate well and show empathy towards one another. We now have shorter, but more frequent, conversations. This enables everyone to remain focused on the priorities, without needless meetings taking place.”

While the boom in online groceries has generated sales for Tesco, the pandemic has also led to significant additional costs, particularly in payroll. “It is our role to both support and challenge our colleagues in the wider business to ensure that we remain disciplined in our approach to costs and cash,” explains Stewart.

The UK faces a very uncertain economic outlook in the near term, yet people still need to eat. “The finance team plays an essential role in providing the right insights on how our customers are shopping, which helps to inform the decisions the business makes,” says Stewart. “Tesco usually serves around 80 million customers every week, which means our finance team can help to drive change on an incredible scale.”