Checkout at 40: Tesco 'Delighted' With Its Irish Operation (August 1982)
This year, Checkout commemorates its 40th anniversary under its current ownership, and with this in mind, every week, Retail Intelligence is going to ‘reel in the years’ and publish a story from our extensive archives. This article from August 1982 focuses on the growth of Tesco, during the retailer's first foray into the Irish market.
"We're delighted with our Irish business,"said the elegantly-dressed Tesco managing director, Ian McLaurin, as he sat in his offices at the new Tesco headquarters at Cheshunt, Hertfordshire.
Cheshunt is on the road to nowhere - a sprawling extension of Greater London, difficult to find, notable only for the fact that it is the home of one of Britain's great retail chains.
The shirt-sleeved MacLaurin sits easily behind his desk surrounded by all the paraphernalia of a chief executive. Coloured pictures grace the walls showing the youthful MacLaurin with Maggie Thatcher and various members of the Royal family. Impressive framed letters with Royal seals adorn MacLaurin’s office.
But nobody could be easier than the quiet-spoken Tesco boss. In discussion he was as knowledgeable about Kells as he was about Kelso. He talked about Sligo with the same familiarity as he discussed Southampton and the message he gave Checkout is that the Tesco board is delighted with the Irish operation.
The Irish stores, he said, always traded profitably but were carrying very heavy financing charges which pushed them into the red. This year for the first time saw them in the black.
What contribution Ireland has made to Tesco’s £43m profit is hard to know, but MacLaurin certainly was dishing out the compliments to managing director, Ceri Mason, financial director, John Murphy, and distribution and personnel director, Jim Moulton.
MacLaurin was not specific about turnover, nor was Ceri Mason about to divulge any secrets, but Checkout estimates that, with the new store development programme on stream, the Tesco boys could hit £100m turnover in 1982 and the bottom line will be worthwhile from the Republic.
Whilst MacLaurin is pleased with Tesco Ireland, one has to look at Ireland in its right Tesco perspective. Last year the overall Tesco group had a turnover of £2 billion and it will be well on figure in the coming year. Profit came to £43m before tax and the company employs 40,421 people. It is a compliment to MacLaurin’s knowledge of business that he was able to tell us that Kells, which was just opened, was running 60% above budget.
At £8 per square foot of turnover and with one and a half weeks of stock in his business, MacLaurin has been spending that last couple of years re-structuring Tesco’s trading philosophy culminating with Checkout ’82.
Some other interesting views from Ian MacLaurin: He worries about all his competitors but doesn’t follow market shares greatly. He rates everybody who has got a shop. His main judgement in terms of efficiency is the bottom line. One of his most important criteria for judging between stores is sales per square foot. He believes in a no nonsense company with an informal approach. Anybody is welcome into his office at any time be he lorry driver or checkout operator. His advertising budget for 1982 is £11m. He believes fully in the central warehouse operation. He thinks that his Irish central warehousing system is highly efficient (more efficient than England) where 60% of goods are delivered by manufacturers, only 40% by the Tesco warehouse. Central warehousing, he says, improves the in-stock situation in all outlets.
He believes his is a more efficient Irish multiple because of his central warehouse and suggested if he were setting up again in the UK, he would be much guided by his Irish experience. He is surprised that small towns like Carlow, Portlaoise, Athlone and Kells can do the volume of business they do.
Maybe, after all, Albery Gubay did not sell them such a pup.
© 2015 - Checkout Magazine