Tesco wants its managers to start saying 'please' and 'thank you' to staff
The company is failing to make its "warmth" apparent to the outside world, Davies said.
"Our challenge is how we demonstrate how much we really care to the nation," said Davies, speaking at the Retail Week Live conference in London on Wednesday.
"It is about celebrating success and the power of appreciation. There is power in saying thank you and of spotting somebody doing a job well and appreciating that."
Store managers should get into the habit of saying "please" and "thank you" to their workers, which in turn would encourage better customer service. But Davies was keen to stress the push for better manners just a general suggestion.
"This is not about a training programme but developing a culture of appreciating one another. It is about celebrating success and the power of appreciation. There is power in saying thank you and of spotting somebody doing a job well and appreciating that," he said.
Tesco has had a tough time in the last few years, especially with competition from discount supermarket chains like Aldi and Lidl, with its share price more than halving since 2012:
Despite strong Christmas trading, Davies knew what an uphill battle Tesco has. "Is it getting any easier? No, not really. It's still a tough market and being hard-fought right across the UK." he said.