Tesco: Leahy and Clarke finally come out fighting

Who’s right about Tesco, Terry or Phil? Or are they both wrong?

terry-leahy-1024_107219kFormer CEO Sir Terry Leahy (left) broke his silence on Tesco on last night’s BBC Panorama programme, blaming a ‘failure of leadership’ (Phil Clarke his successor as CEO) for eroding consumers’ trust in the UK’s biggest retailer. Clarke, in response, said that Tesco faced debilitating ‘structural issues’ when he took over four years ago.

Actually they’re both right. Leahy is right to say that Tesco’s customers expected the lowest prices in its stores. There aren’t, after all, that many other reasons for going to them.

Clarke swept through Tesco’s top management (despite the fact he’d been there for decades working with these characters, supposedly), tried to apply lipstick to the unlovely face of Tesco with ventures like Giraffe cafes and Harris & Hoole coffee shops and, crucially, allowed prices to slide upwards.

At the same time, though, he had to deal with the disaster that was Fresh & Easy in the US, Leahy’s idea along with, presumably, US boss Tim Mason, Clarke’s long-time rival for the top job. Clarke was never equipped for the sort of front of house role required of a Tesco CEO; speaking to the media and the City. But Leahy presumably knew this when he allowed Clarke to rise to number two and heir apparent in the organisation.

Oh well, it’s all water under the bridge now (apart from outstanding legal investigations into Tesco’s accounting). And it’s rather good news for new(ish) CEO Dave Lewis from Unilever.

Straight-talking Dave is winning plaudits all round and Tesco’s share price is even picking up. No idea how long Lewis intends staying at the new Tesco Towers, set for Welwyn Garden City. Maybe new UK stores boss Matt Davies, former CEO of Halfords, is already the heir apparent.

Lewis is right to be thinking about succession management even at this early stage. That’s one thing that both Leahy and Clarke got completely wrong.

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