Why Tesco Express wasn't

The powerful combination of focus and persistence on business success

A little more examination of the format's development suggests that nothing could be further from the truth. There was no overnight success for the model. In fact it took over 6 years for the company to get over 20 stores off the ground. Express by name? Yes. Overnight success? Hardly.

So how did this ugly duckling become a swan? What were the stages of development and growth? What were the drivers of success? And, most importantly, what lessons does this give you in creating your own growth strategy?

Tesco's convenience concept was developed in 1993 and the first store was on the ground the following year. However, even 5 years later, there were little more than a dozen stores, highlighting the fact that throughout most of the 1990's Tesco were, in essence, tinkering with the format. In fact you can detect three key periods

• 1994-1999 - proving the concept. By 1999 there were 17 stores, and the Annual Report noted that it was becoming a "promising format". At this time a joint venture with Esso was announced
  
  
• 1999-2003 - creating scale. Openings of new stores are accelerated and the model is further refined. There were 109 stores by 2003
  
  
• 2003-2006 - driving turbo growth. Tesco acquires T&S Convenience stores, and sets about rebranding them in addition to new locations. Current store numbers of 751.
  

This picture of success contrasts all too vividly with many companies. Driven by their desire to find a magic success, the need to please analysts and investors, and the temptation to find clear blue water with troublesome competitors, many businesses fall into the trap of reaching for ill-conceived, quick win solutions. Invariably they fail, and the company lurches from one strategy to another.

So what lessons can you learn for your business? I suggest 5 high-level take-outs from this review

1. Clear strategic focus - At the heart of any strategy is focus and trade-off. The Tesco team had a clear view of where the Express format sat in its future success. They knew that there was a significant customer and financial opportunity if they could find the right solution. The development of the format wasn't a "suck it and see" but a strategic move. It was the individual trials that were the tests not the overall concept.
   
   
2. Don't take your eye off the core business - Tesco was busy driving growth from its core business as it developed the Express format, not seeing the new concept as the answer to all its problems. Without a strong core business, growth into new, adjacent areas will not work.
   
   
3. Build the economic model before rolling-out - It took 5 years and 17 stores for Tesco to prove the economic model of the Express format.
   
   
4. Consistent management commitment - despite early difficulties with the Express format, the Tesco management remained committed to its success. They knew that there was demand from their customers for this type of store, and that there were scale opportunities. It was therefore a matter of persistence and focus that ultimately delivered success.
   
   
5. Manage external expectations (down!) - Annual reports and presentations are opportunities to share success. For executives under pressure there is the temptation to focus on the new, the untried in the hope that this will distract attention. Successful companies such as Tesco play down the importance of the new areas until they have delivered material benefits.
   

The basketball legend, Michael Jordan, once said "I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."

I think the team responsible for developing the Tesco Express format would agree totally with that sentiment.