Tesco Ireland’s new chief executive, Natasha Adams, is standing in the fresh produce section of the group’s brand new store in Dublin’s South Lotts Road near Ringsend, which opened on Tuesday.
The store is situated in one of the city’s more diverse areas, on the nexus between the moneyed technology haven of the Docklands – Europe’s Silicon Valley – and an old working class neighbourhood.
Adams, smiling broadly as she gets her picture taken, warmly greets an approaching customer, a rather rustic-looking older fellow in a sports top. He grumbles something in response and she quickly steps aside, her smile fixed.
The man, without breaking stride, proceeds to fill his basket as the photo shoot shifts out of his way. He wants vegetables, not a chat. Adams is still smiling. Welcome to Dublin’s fair city.
The new South Lotts convenience store, a stone’s throw from Google, is Tesco’s 154th in the Irish market, which it joined 25 years ago when it bought Quinnsworth.
With nine acquired Joyce stores in Galway ready to rebrand, and three new Dublin outlets due to open in 2022, Tesco wants to expand quickly in the Republic as the dust settles in the market after the Covid-driven grocery boom.
Its reported annual sales here of close to £2.5 billion (€2.9 billion) are declining by close to 3 per cent year on year, as the market recedes from pandemic highs towards normality.
But its revenues are still well ahead of pre-pandemic times – its last quarterly sales were still close to 10 per cent ahead of 2019. Tesco does not break out its Irish profits, but it would not be a surprise if they were close to €200 million.
Adams, London-reared but Irish born (she is originally a McGillycuddy from Kerry), has been sent back to her home turf by the Tesco group’s Cork-born chief executive, Ken Murphy, to steer it through the inflation crisis and also to oversee its expansion drive.
Tesco Ireland will invest €50 million this year on revamps and new stores, including several smaller-format Express outlets, as well as a couple of the group’s larger “Format 25” superstores.
“The convenience market is very competitive and one where we see an opportunity,” she says.
“You will see the majority of our store openings will be in that sector – small high street outlets and Express. But we are also investing in larger stores, such as in Adamstown [west Dublin] later in the year. That one’s a really nice superstore. Not ginormous, but with our full F&F clothes range as well as home and grocery.”
She confirms that Tesco has no plans for now to open any more of the cavernous Extra large-format stores, typified by the 100,000sq ft Clare Hall outlet that sprawls off the Malahide Road in north Dublin.
Adams took up her position only in April, replacing Kari Daniels, a low-profile executive who ran Tesco Ireland from 2018 but left the business earlier this year, months after Tesco’s board performed a “deep dive” into its Irish operation.
It recently regained its crown as the largest grocer in the country with a market share of 22 per cent, although it vies constantly for the top spot with its rivals Dunnes Stores and Super Valu, which are practically the same size as it.
Adams is the most senior Tesco group executive ever to have run the Irish business. Since 2018, when she took over as the group’s top human resources manager, she has sat on Tesco’s powerful executive management committee, which is tasked with implementing Murphy’s vision.
The committee has a strong Irish flavour. As well as Adams and Murphy, it also includes the group’s communications director, Christine Heffernan, who joined from the Irish business, and former Ulster Bank chief executive Gerry Mallon, who now runs Tesco Bank.
It also includes another former Tesco Ireland chief executive, Englishman Andrew Yaxley, who ran the business here from 2015 until Daniels took over in 2018. He now runs Tesco’s Booker wholesale business.
Adams, perhaps wisely, won’t be drawn in on whether there is an Irish clique at Tesco’s top table: “But with my appointment came a seat at the executive table for Ireland as a business. It’s a market we have big ambitions for.”
The cost-of-living crisis has hit hard in the grocery sector, where inflation of 7.7 per cent is at a near 15-year high. Adams acknowledges the pressure families are under. She says she also understands the pressure on suppliers such as the farmers who grow its fresh produce. But she is adamant that the company must remain “the champion” of the consumer.
“Prices do have to go up. I wouldn’t want to predict whether they have peaked or not – that’s a bit of a Mystic Meg question. But the reality is that other challenges from an inflationary perspective are waiting in the wings, in the form of energy price increases.”
She acknowledges that the businesses in Tesco’s supply chain are also under pressure on costs, and will want to pass them on. But for customers, Tesco will aim to keep prices “as low as they can possibly be”.
“We will negotiate fair prices. It’s about partnership and dialogue with our suppliers. We have to be fair to all of our stakeholders. But we also have to step forward as the customer champion.”
When Ireland’s grocery market battleground shifts to a price war, as it did previously during the great recession that began in 2008, the German discounters Aldi and Lidl have always made gains at the expense of their larger competitors. They will fancy their chances of doing so again during the inflation crisis. Is Adams prepared to do battle with them on price?
“Customers are way more savvy these days, and for us it is about value. Price doesn’t necessarily determine the value and the quality you get. We’re fixated on value in its entirety. We feel like we are coming at this from a position of strength.”
In January, the company introduced into the Irish market its “Aldi price match” promise from Britain, where it vows to match its rival’s prices on about 250 core grocery items. Adams may be reluctant to declare a price war on Tesco’s rivals in Ireland, but it isn’t necessarily shying away from one either.
“There is no competitor standing still in the Irish market. We’ve got our runners on.”
In the meantime, Tesco will attempt to grow sales through expansion by opening new Tesco Express stores in Smithfield and Charlemont Square in Dublin this year, swiftly following its recent Express openings in Spencer Dock and South Lotts. Adams hints that other larger format openings will follow Adamstown, while it also presses on with refits of older stores, such as at Artane Castle.
“We have a line of sight towards growing our business in a significant way over the next three-five years,” says Adams.
She joined Tesco group in Britain in 1998, the year after it entered the Irish market. Adams originally wanted to teach religious studies and theology, but shortly after she entered university, she discovered “it just wasn’t for me”. She had worked in retail all through her teens, and so she “turned my part-time job into my full-time job”.
She joined Tesco’s management training programme and started out as a trainer, before becoming personnel manager at a number of stores. Progressing through the ranks in human resources, as well as a number of senior operational roles, she emerged publicly as a senior figure in the group in 2018 when she took over as chief people officer.
Adams was in charge of Tesco’s human resources function throughout the crazy days of the pandemic and lockdowns. In one 3½-week period at the height of the crisis, she oversaw the hiring of 50,000 staff for its UK business.
It was, she admits, a “frightening” time. It is said that her calm stewardship of Tesco’s people department during this period caught Murphy’s eye.
She says she had “conversations” with her leaders about progressing her career, and this February it was announced she would take over the Irish business. It is, in effect, her first big commercial role at Tesco.
Her human resources training quickly became apparent when she moved to Ireland, however. One of her first big decisions was to sign off on a 6 per cent pay rise for Tesco Ireland workers in April, with a further 4 per cent for April 2023.
Her move to Ireland represents a homecoming of sorts. Adams’s parents, both Kerry born and bred, ran a construction company in Ireland but lost it all, including their Glencar home, in the recession of the 1980s.
Her father moved to London to find work and the family, including seven children, soon followed. Adams was seven when she moved across the water.
The McGillicuddy family become successful again in the building trade in Britain (members of her family own the successful Glencar Construction group) and, in a neat closing of a painful circle, her parents returned to Glencar and bought the house that they had lost years previously.
“That was a special moment for our family,” says Adams.
There has always been something approaching genuine affection for the Tesco name among consumers in its home market of Britain. But its relationship with customers in the Irish market has always seemed more transactional and pragmatic.
“One of my ambitions for the Irish business is that Tesco is a loved brand by Irish consumers,” says Adams.
Is it not loved by Irish consumers now?
“It’s loved by my mum.”
That’s always a good start.
