Tesco wants to infuse innovation into its overall business culture, but there are challenges to doing so, IT director Rob Hattrell has admitted.

“You want innovation embedded in the business. The truth is, few businesses can do that,” Hattrell, Tesco IT director for UK & Ireland, told the CA Technologies Open Day event in London.

His comments will surprise many, since Tesco has an enviable reputation for innovation. The supermarket giant currently operates a separate research and development (R&D) team, which Hattrell said was useful to demonstrate innovation to the business, but it was not his preferred option.

“You have to create some physical points where you generate innovative activity. You need to create some nuggets to show the business the good things,” he said. “[But] the ideal is to create a culture of innovation.”

Hattrell believes that his IT team will be completely different in five years’ time.

“I think we will do fundamentally different things. I don’t think we will run all infrastructure, we will be broken into infrastructure and services,” he said.

One of the main challenges to Tesco’s innovation is the fast-moving nature of the retail industry, which means that Tesco also needs to respond immediately.

“The reality is the competitive advantage [from innovation] is for a very short period of time. You’ve got to be more confident at taking risks, and you’ve got to move faster,” said Hattrell.

However, he said that Tesco was not quite in line with customer expectations about the company’s physical and web services.

“We believe around 40 percent of our customers have access to a smartphone. Our customers now move seamlessly between internet and stores.

“[But] if I’m honest, they [store and internet] are very separate businesses. Those physical worlds are blurring and customers are expecting it to blur already,” he said.