Editor’s blog: Tesco softens up
If I were a supplier to Tesco – which I thank my lucky stars I’m not – I’d be experiencing yet another chill down the spine hearing from the new CEO Philip Clarke that a bit of ‘sharpening’ is in order around his new UK fiefdom. The knives are never sharper than those wielded by Tesco buyers. A friend of mine who was taken on as a graduate trainee at Tesco years back once told me how they handled negotiations with meat suppliers at Cheshunt. It was one stop short of water-boarding.
Terry Leahy is a near-impossible act to follow. In fact, one suspects he has played a blinder by getting out with his reputation so unblemished and at a point when the home market has turned more than a bit queasy. The UK business has stagnated. Last year underlying sales were flat and the profit margins declined slightly. But Tesco didn’t do that badly. The broader problem is that we are way over-shopped in the UK and it’s getting ridiculous. The big chains are still engaged in a desperate fight to the death, building more and more stores and trying to grab market share. At the same time consumers are hunkered own in their hair shirts spending less. And when you feel you deserve a treat you head to Waitrose or M&S, not for the Finest range.
One can see what Phil Clarke is up to. Tesco has for the length of Sir Terry’s reign been characterised by a no-nonsense harshness. Tesco at the corporate level was the reverse of cuddly – pretty spiky. If you weren’t with them, you were against them. So, even when they made some good progress on green issues it wasn’t widely reported.
We’ve been lucky here having never got on the wrong side of the machine but Clarke appears to acknowledge they need to loosen up a bit ‘certainly think that in the way that I deal with the press and with investors and with our own people, I can soften it a little’.
Clarke will have to watch himself if he plans a more open and communicative stance than Sir Terry. There are an awful lot of folk out there in this country who dislike Tesco a lot and the policy has always previously been to ignore them and keep marching on. If you engage then a public punch-up might occur.
So Clarke is Tweeting about what he’s up to: ‘On a foggy M40, UK. Visiting an investor, then stores’. It’s a start, but I fear he isn’t going to get a Stephen Fry-sized following with that kind of utterance. And there are limits to Tesco glasnost: ‘I would not go as far as touchy feely,’ says Clarke. Tesco, ‘touchy feely’? Perish the thought.



