Shore Capital welcomes festive customer-service push at Tesco

Shore Capital has welcomed new measures by Tesco to “crank up the customer service” ahead of Christmas, suggesting that competition from the rival discounters may be waning.

Looking ahead of the all-important shopping week before Christmas, analyst Clive Black said that while the Big Four will likely be the “laggards” of the food retailers, Tesco might not perform the worst.

“Whilst the price and promotion proposition remain to be determined by [new boss] Dave Lewis, there may be much needed signs of stabilisation from the market leader,” he said.

Tesco announced on Wednesday that it would be “step[ping] up customer-service efforts” ahead of Christmas. Some 400 stores will have extra small teams of bag packers and all large shops will also have a “dedicated greeter at the store entrance”.

Black said: “The update from Tesco gives us a little colour as to what management means when it talks about increasing store labour participation by millions of hours noting as we do that we sense Tesco is striving to better set up stores, assisted by a night shift in some cases, and build availability.”

6,000 new staff have joined the retailer since October and its Customer Service Centre has recruited over 850 seasonal workers.

Meanwhile, Black said that the so-called ‘limited assortment discounters’ such as Aldi and Lidl may be struggling with “over-trading” and the customer shopping experience in stores “is suffering”.

“We can see scope for considerable chaos, 'Black Fridayesque' perhaps, as tempers fray in the LADs small car parks, folk fight over the last of the fresh turkey, caviar and lobster, and long queues increase the tut and puff quotient.

“Indeed, the LADs, now under visibly greater scrutiny by the trade and financial media plus the investment industry, may be hoping that everyone doesn't turn up for Christmas.”

In contrast, Black said there is “plenty of space to shop in comfort” at Tesco: there are large amounts of space at Tesco’s Extra stores and car parks, along with the addition of staff greeters “to help you on your way” and bag packers at check-outs.

Shore Capital kept its ’hold’ recommendation on Tesco, which was trading 1.2% higher at 170.1p by 09:34.