Truculent Tesco boss braced for an ear-bashing
The knives are out for Philip Clarke. But only a fool would write him off
Tuesday 15 April 2014
Philip Clarke faces an unusual and daunting critic, one with an inside view of the retail behemoth he runs and a deep concern about its legacy. No, not his predecessor Sir Terry Leahy but his own father.
Himself a former store manager, Norman Clarke’s opinions are often relayed by his son at press conferences as jokes about how his dad keeps him on his toes. Whether it’s the quality of Tesco’s own-brand ready meals or the priority given to his local Tesco in the retailer’s store revamp programme, Clarke senior always has a view.
A penny, then, for his opinion tomorrow, when Tesco is likely to reveal the worst half-year performance in his son’s three-year reign as the grocer’s group chief executive.
The Tesco chief’s problems stretch far beyond those which existed when he began stacking its shelves in 1974. He has to puzzle over keeping sales moving in the 12 countries in which Tesco trades, and he must decide how best to cater for shoppers who want to buy their potatoes online and have dinner in his stores.
More pressingly, he has a scrap on his hands to fend off competition from discounters Aldi and Lidl and premium rival Waitrose as Tesco’s precious market share ebbs away. The lacklustre performance has disappointed investors and analysts alike and its shares are at their lowest point in a decade.
A Tesco lifer who has held positions in charge of IT and international, Mr Clarke will be cut deeply by the grocer’s difficulties and it is understood he puts huge pressure upon himself. An ardent Liverpool fan, he will hope his football team’s strong run of form can be replicated in his own organisation.
So should he lose his job? One analyst has claimed he has been “ fiddling while Rome burns” and there’s a feeling that as soon as the Liverpudlian gets the hose out on one problem, another flares up.
The departure of his finance chief, Laurie McIlwee, this month was seen as the result of another pugnacious clash between Mr Clarke and one of Mr Leahy’s old guard – and arguably his only feasible short-term internal successor.
Tim Mason and Richard Brasher – two other candidates tipped to succeed Mr Leahy – have been ousted from the business during his tenure, the former retweeting negative articles about the company on Twitter this week. “Philip is a very autocratic leader,” says one former Tesco director. “He saw the knives were out from Terry’s people and replaced them with those who owe their careers and bonuses to him.”
Bruno Monteyne, a senior Bernstein analyst and Tesco critic, says: “I would not expect any hasty decision to be made on Phil Clarke’s job in the short term. There’s no obvious number two waiting in the wings.”
As for possible external successors, investors have suggested John Browett, chief executive of Monsoon Accessorize, who used to work at Tesco and run Dixons and Apple, and Dave Lewis, head of personal care at the consumer goods firm Unilever. However, it is hard to see a head of steam building behind either choice, not least as Mr Browett left Apple after less than six months.
Mr Clarke has also shown he is ruthlessly decisive. He has presided over a retrenching of overseas ventures in the US and Japan and last year he wielded the axe on 50 senior directors, intimating that they didn’t have the right skills for the new online retail world.
“He is a decisive leader and you can’t do that without making enemies,” says another former Tesco executive. “He is a little acerbic and likes to challenge junior staff, which can be intimidating – the trick is to give back as good as you get with Phil.”
Mr Clarke is also clearly not one to waste time. Last year he was banned from driving for six months after being caught speeding in his Jaguar XJ. He also turned up at a management training day in a Ferrari shortly after store managers’ Christmas bonuses had been cancelled, it has been reported.
But does that make him the wrong man to change Tesco’s culture from a relentless winner to a pragmatic organisation building for the future? Decisive leadership is clearly what is needed and a degree of impatience is vital in retail, where trading can turn on a wet weekend.
Moreover, Mr Clarke has led the way among retail chiefs in facing up to the changing face of the industry.
He has helped build an online grocery business which leads the market, acquired an accomplished digital video streaming arm in Blinkbox and even created a platform on which to watch it with the popular Hudl tablet.
The 54-year-old’s life has been defined by Tesco: he spends his weekends analysing its shops and he lives in its Hertfordshire heartland. Clive Black, a Shore Capital analyst, says Mr Clarke’s 40 years of experience have given him a “clear sense of responsibility” over Tesco’s future.
He will be hoping to put tomorrow’s numbers behind him quickly and get Tesco singing again, if only to prevent an ear-bashing next time he calls his father.
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