Examination of Witnesses (Questions 321-339)
MR DAVID
NORTH, MS
LIZ KYNOCH
AND MS
PENNY COATES
29 JUNE 2004
Q321 Chairman: Good afternoon. Welcome
to the Committee. We have as witnesses Mr David North and Ms Liz
Kynoch from Tesco, and Ms Penny Coates from Asda. Thank you for
the written evidence provided to us earlier by Asda. We look forward
to hearing what you have to say to us in answer to our questions.
I will begin with a question that is addressed to both Tesco and
Asda. Tesco, in its evidence to the Health Committee of the House
of Commons a few months ago said that consumers were uncertain
about whom to trust. They felt they lacked knowledge on food safety
and nutrition and were not confident about who to turn to for
reliable information and advice. Where do you think the most suitable
means of providing information should be placed? Who do you think
should take the lead in providing information to consumers of
that type?
Mr North: Our view is, rather
as the representatives from the Co-op said, that responsibility
or the role of providing information rests with a number of different
organisations or sectors. What our customers tell us, again as
the Co-op is saying, is that they trust different sources on different
pieces of information. On specific information, for example, they
might trust brands like Tesco; on food safety messages, they are
increasingly likely to trust agencies like the Food Standards
Agency or whatever. It will rather depend on the issue or on the
product.
Ms Coates: As David says, in terms
of trust there are a number of different sources of information
to customers, and they include the press and the Government. A
lot of customers say that they are heavily influenced, particularly
women when they become influenced, by the advice that they get
from clinics and so on. Schools have a big part to play in the
education of customers, as do we, and food manufacturers. It is
very much a joint effort, and we all need to work together to
one agenda to achieve that.
Q322 Chairman: Do you not think there
could be a greater role played by in-store placement, in-store
advertising, for example? You will see advertisements in supermarkets,
and products being pushed by the retailer that you do not see
in the same way with encouragement of fruit for example.
Ms Coates: We do try and balance
the advertising and their promotions, and the placement of products
in-store. For instance, in almost all of our stores the first
products that you come across when you go in are fruit and vegetables.
The healthy-eating ranges are clearly marked. We do not tend to
promote products anyway within Asda. The sort of levels of promotion
we have, or multi-buys and things, would apply equally to less
healthy items as healthy items. We do provide choice in that.
If you are asking if we could put more focus on promoting healthy
foods, then I am sure we could, and we can work towards that.
Mr North: I very much agree with
what Penny has said. When we counted up, on an average basis,
weekly promotions across our fruit, vegetables and salad ranges,
we counted up typically to around 80 or so per week. That compares
with, for example, confectionery, around 15 promotions in an average
week, albeit rising to around 50 or so at key times of the year
such as Christmas and Easter. The other relevant point is that
when one looks at the total amount we spend on promoting produce,
that is fruit, vegetables and salads, and express that as a percentage
of our total promotional spend, then that amount spent on produce
will exceed the proportion of the total sales of those products.
Q323 Chairman: I came across a document
that I think was circulated to all MPs from the charity NCH recently
about issues of healthy diets, particularly for children and families
on lower incomes. One of their suggestions was that sponsorship
and repeat promotions should only be used for healthier foods.
Is that not a fair approach to take?
Mr North: In terms of promoting
healthier diets for children, again there is a range of techniques
that can be taken, and a range that are successful. To take one
example of our fruit and vegetable products, last year we took
the phrase "reverse pester power" with our fruit products,
and managed significantly to increase our sales of apples by linking
it to a Barbie Doll campaign, and they were our best-selling apples
for a while. There are other factors obviously that will influence
low income diets, including low income diets among children. One
of those is the location of stores and the price of food as well.
An interesting piece of research was carried out in one of our
stores in Seacroft in Leeds where the University of Southampton
did some research and found that by putting a new store in that
area where retail and food retail provision previously had been
poor, the period following our opening of the store showed an
increase of one-third in fresh fruit and vegetable consumption
amongst the lowest income consumers. There are ranges of approaches.
Q324 Joan Ruddock: I apologise if anyone
has asked this before but I was at a ministerial meeting and that
is why I was late. You mention pester power. I just wondered if
you, in using that term, were trying to encourage a certain form
of behaviour from children towards their parents. Is that right?
Mr North: No. I think it is a
term that is sometimes used as a critical term for an allegation
of behaviour. The point that I was making was simply that one
can use promotional techniques in relation to fresh fruit and
vegetables, just as one might in relation to other products.
Q325 Joan Ruddock: Does that not mean
that you are suggesting to a child that the child should pester
the parent to buy a product in your store?
Mr North: No, as I say, I was
using a term that is commonly used as a criticism of techniques
and saying that one might make that criticism of something that
was used to promote fruit and vegetables.
Q326 Joan Ruddock: Did you use it or
did you not? That is what I am trying to get at?
Mr North: I referred to it as
being an allegation that was made and said that we were promoting
fruit and vegetables.
Q327 Joan Ruddock: Did you use pester
power in some way to promote fruit and vegetables?
Mr North: No. What I said was
that this was a phrase that was used, but that, if one looked
at what we were doing in respect of fruit and vegetables, that
was linking fruit and vegetables to a Barbie doll promotion that
had been very successful in selling fresh produce.
Ms Coates: We are actually running
a programme called "The Big Healthy Eat", which is aimed
at children and taking children round a nutritional trail. There
is a trail for different ages. We are actually running that across
the country. One million children will go through this across
a four-year period. We have been running "big healthy"
campaigns for schools a total of seven years. We believe that
encouraging children to try different healthy options through
groups like this, and enjoying them and then coming back and wanting
more, is a good way to encourage them to eat healthily. That is
one of the techniques that is working for us at the moment.
Q328 Mr Mitchell: It is a long time ago
since I was a kid but I remember that towns in the north were
dominated by a kind of religious competition between the Methodists,
Congregationalists, Catholics and Anglicans. Now the titanic struggle
which dominates their lives is Asda versus Tesco. You belong to
one denomination or the other. I am just wondering how far the
concern with virtual food standards is really a result of that
competitive pressure. Is being virtuous on healthy eating and
efficient labelling an essential part of competition these days?
Ms Coates: I think it is an essential
part of conscience and responsibility.
Q329 Mr Mitchell: Yes, but it is conscience
only recently discovered.
Ms Coates: It has probably been
highlighted more recently but I think nutrition has always been
at least considered. I think that would be true for all of the
grocers.
Q330 Mr Mitchell: Are you doing it because
they are doing it and vice versa?
Ms Coates: No. We are doing it
because customers want it.
Q331 Mr Mitchell: Is it an aid to sales?
Ms Coates: I guess that depends
on the individual customer and what it is that they are looking
for. It may be for some customers that having more information
about health and healthy campaigns is an aid to sales but, at
the end of the day, it is a combination of a social responsibility,
and hopefully everything we do is that.
Q332 Mr Mitchell: You must have done
surveys to show what the customer wants and whether it pays or
not?
Ms Coates: Yes.
Q333 Mr Mitchell: What do the surveys
say?
Ms Coates: What customers want
in terms of information on nutrition and things varies an awful
lot customer to customer. Often women, once they become pregnant,
become a lot more interested in nutrition and healthy eating.
That is one of the points in their life that seems to turn them
more towards taking more notice of information. The counter to
that is that we do get an awful lot of feedback that says, "I
just do not have time to look at this. I have three children and
a trolley going around a busy store and I have a few seconds to
make a decision on what I purchase. You have too much information
on there." I think it varies enormously between individual
customers and their requirements. I suppose what we are trying
to do is find a way through this that satisfies most customers.
Q334 Mr Mitchell: Have you anything to
add to that? Am I being unduly cynical?
Ms Kynoch: You ask if this is
a recent thing, but most of the retailers have had a healthy range
for a number of years. I think ours is 25 years old. Providing
healthier products is not something that is desperately new. I
think I would agree with what Penny Coates has said: we are very
driven by what our customers want and if they tell us that they
want more healthy products, or they tell us they want clearer
labelling, then that is exactly what we do. We do that based on
customer research. Healthy products per se are not particularly
new.
Q335 Mr Mitchell: When it comes to government
responsibility, everything seems to split up. It is not only British
responsibility; it is European responsibility and you have the
split between Defra and the Food Standards Authority. How clear
is it to you as retailers who is responsible in government for
agreeing and communicating full information?
Ms Coates: I think it would be
really helpful if we could have a completely joined-up agenda.
I think there are lots of different parties. It is a very complex
issue. From my point of view, a single agenda with a clear list
of priorities that we all work towards would be the most helpful,
from one source.
Q336 Mr Mitchell: Does this division
of authority cause you real problems?
Ms Coates: It does sometimes,
yes.
Q337 Mr Mitchell: How about Tesco?
Ms Kynoch: I would echo that to
a certain extent. Clearly there is a Health Protection Agency
now and a Food Standards Agency. Some points and agendas which
are similar would be very helpful to all of us.
Q338 Mr Mitchell: What is your experience
of working with government agencies and government organisations
on issues like this?
Ms Coates: Perhaps this is limited
and my colleagues may add to it. I think that whatever is the
most topical point of the day is pushed very hard by the Food
Standards Agency to retailers in particular, but the food industry,
of course, is larger than just retailers. Whilst I think we all
accept we have a very huge part to play, the industry is very
wide and a great number of products are now consumed outside the
home and not purchased from retailers. There must be a holistic
approach from the Food Standards Agency or the Health Protection
Agency to the industry as a whole. I believe they do talk to different
sectors of the industry. I would say that, yes, they are challenging
and we hope we can step up to the mark and do the art of the possible.
Q339 Mr Mitchell: How frequently do you
have contact with Government on these issues?
Mr North: I think contact of one
sort or another would be almost daily, whether it is on an individual
issue or on wider ranging issues like obesity. Contact with Government
is frequent.
| 
