MPs recently talked about large charities being the Tescos of the sector. It was meant as a rebuke for the way that the sector was developing: that larger charities are taking an ever-increasing share of the sector’s resources. There is no doubt that small charities are finding it harder and harder to survive. But that shouldn’t disguise the fact that charities have a huge amount to learn from Tesco. And any charity that is compared to Tesco can decide whether to be thrilled for all the things that are good about them, or devastated for all the things that people dislike about them. Either way here are five things I think that charities can learn.

1. Tesco understands branding inside and out

Have you met anybody who didn’t know whether they shopped at Tesco? Have you met anybody who has just come out of a Tesco and said ‘I’m not sure if it was Asda or Tesco?’ I thought not. Let’s face it. Love them or hate them nobody is unsure about which supermarket they use. Indeed see a blue, red and white plastic bag and you know it’s from Tesco’s. Every price tag, every aisle, every employee, every store is branded. Their consistency at the visual brand is incredible – but also at the values level.
And yet back in the 70s Tesco was a small regional supermarket chain with a mixed reputation. Now they have 30% of the grocery market and £12 out of every £100 spent at Britain’s tills. This incredible growth has been fuelled by a strong brand and strong brand extensions: Tesco metro, Tesco express, as well as expanding in clothes, mobiles and a host of other areas. Even our largest charities can just drool at Tesco’s brand clarity and ability to extend its brand into new areas. 

2. Tesco understands their customers

Tesco have used their club card and their knowledge of the customer base of different stores to drive astonishing variation and customisation in their stores (and the agency behind this is now the second biggest market research agency in the UK). The club card has given Tesco an astonishing insight into who shops at their stores, what they buy and when they buy it. So if a store has more customers with children in nappies, there will be a greater choice in nappies at their store. If a store has more customers from an ethnic community then they will have specific products suitable for that community. Moreover the club card customers will get vouchers and offers which encourage them to use the products that are most suited to them, that they don’t yet buy. So if they buy nappies at a store but not baby food they might get vouchers with offers on baby food. Tesco uses their data to encourage people to buy products that are most appropriate to them. We see it all the time on Amazon and the way they recommend products. But Tesco got there first and it’s a lot less obvious, but has been a key factor in their success.

3. Tesco has invested for growth

Tesco didn’t get to be the dominant force in the UK supermarket world just by being good at branding and by using customer data. They invested for growth in the UK and overseas. They have been prepared to invest in hundreds of new stores because they know that the return on their investment will mean they will get their money back many times over. They have invested for growth overseas as well: buying business in the United States and in China. They are also prepared to see their investment paying back over a 5 year or even 10 year time frame. There are still too many charities that want to grow their income, but aren’t prepared to wait long enough for the payback and want to see returns so quickly that all but the most profitable forms of fundraising are ruled out. Tesco, like many other companies, is prepared to invest to grow and play the long game. Charities take note.

4. Tesco knows how to argue, make a decision and then stick to it.

I bet this isn’t a heading you expected. It comes about because of a client who worked for Tesco and then came to the charity sector. Their observation was that in Tesco they used to have big arguments about all sorts of issues, they would make a decision and then everybody would stick to it come what may. Their observation was that Tesco has extraordinary corporate discipline. They compared this to the charity sector where they said nobody argued, but whenever a decision was made it was never clear who would and wouldn’t support it. Colleagues could be lukewarm at best and actively detracting behind the scenes at worst. In effect, our Tesco émigré was discovering the passive-aggressive nature of many charities. In contrast Tesco understands the importance of strong organisational discipline in making things happen – and many many charities could learn from that.

5. Tesco knows how to make sure that ‘every little helps’

Tesco live their strapline: ‘every little helps’. The whole shopping experience is disconcertingly efficient. I have been into a Tesco’s store desperately wanting to find fault with the store or its staff – and failing. Shelves are always fully stocked. Staff are always wonderfully trained and know where things are. There are great offers to tempt me. Tesco works on every detail of the customer experience and they get it right. I wish I could say this was something every supermarket does – but it isn’t. My two local supermarkets run out of the products they put on special offers, have freezers which leak on the floor and can never seem to get enough staff on the tills to avoid queues. Tesco makes delivering great customer experience look easy but it isn’t.

You may not like Tesco, you may not shop there, and you may not like their dominance or their treatment of suppliers or their approach to local authorities and planning permission. But don’t let the instinctive charity dislike of supermarkets and the market leaders stop you from seeing how much every charity can learn from them.