Business View: Brasher and Bolder. After the food feud, Tesco must deliver the goods

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The Independent Online

You have to feel a little sorry for Tesco. Britain's most successful retailer of the last decade will, on Tuesday, announce a rollicking set of results. With hefty increases in sales and profits, it has now put clear blue water between itself and its nearest rivals, Asda and Sainsbury's.

But Tesco knows it must not shout about it. The supermarket's executives, led by Sir Terry Leahy, will be pouring cold water over the results this weekend to make sure Tuesday's presentation is as anodyne as possible. With just a few weeks to go before Patricia Hewitt rules on who can buy Safeway, the last thing Tesco wants to do is remind the Secretary of State for Trade and Industry how dominant it is. Deep down, Tesco knows it hasn't a chance of being allowed to buy the UK's fourth-largest supermarket chain. But it may just be allowed to pick up the odd Safeway store if the group is carved up, and it doesn't want to spoil its chances.

So, assuming Ms Hewitt doesn't have a funny turn and allow Tesco to buy Safeway, where will Sir Terry and co go from here? Because of this country's strict planning laws, surely Tesco's growth now lies in the far climes of Thailand and South Korea where it is expanding? Not so.

In a typically low-key atatement last week, the company pointed to its future - and it is firmly in the UK. Richard Brasher, Tesco's director responsible for non-food, is to replace John Gildersleeve as the company's commercial director. Mr Brasher will join the main board in March. Thus ends a power struggle that has raged since the early 1990s between Tesco's old guard - the traditional food buyers - and the new blood - the marketers who have pushed the concept of service and stocking the shelves with a wider range of products.

Non-food goods - whether kettles, computers, CDs or clothes - offer juicy margins. Tesco has started to give these products extra oomph, noticeably with its recent television advertising campaign for its Cherokee clothing range.

But it still lags Asda in this area. The Wal-Mart-owned store has a long history of selling all manner of things to its customers on the weekly shop. And it will take more than a slick advertising campaign to loosen Asda's grip on the clothing market with its successful George range.

Tesco's Mr Brasher is regarded as a talented operator. Ambitious, aggressive, some critics say a little arrogant, his move to the main board will mean Tesco pushes its lucrative non-food ranges harder and, if successful, widens the sales gap between it and its rivals.

Just don't tell the Secretary of State.

More Montagues please

If a big public project gets into trouble in America, George Bush calls in the secretive Bechtel Corporation. A significant donor to the Republican party, the giant project management firm employs 47,000 managers, engineers and financiers,

In the UK, if a project goes belly-up, the Government turns to one man - Adrian Montague. A lawyer turned investment banker, Mr Montague helped to kickstart the Private Finance Initiative when he was head of the Treasury Taskforce. He was brought in to pick up the pieces after the former Transport Secretary, Stephen Byers, pulled the plug on Railtrack. Mr Montague is now deputy chairman of its successor, Network Rail.

When British Energy went cap in hand to the Government, it wasn't long before Gordon Brown was on the blower to his banker friend offering him the unenviable job of chairman of the stricken nuclear generator. And last week, Alistair Darling announced that Mr Montague had been hired to get Crossrail, the long-talked- about east-west London rail project, going.

When Mr Montague left City law firm Linklaters, one senior partner noted that he was the firm's "best hire since the war". But surely the Government has other bright sparks it can turn to? The problem is, it hasn't.

A time will come when Mr Montague will want to return to the City as a no-nonsense banker with the seven-figure salary that goes with it. Who then will fix the railways and pick up the pieces of botched privatisations? Mr Brown has a smattering of bankers working for him in the Treasury, but the civil service wages do little to attract others.

As the Government jumps into bed with private companies to deliver public services, it must find new ways to tempt more Montagues into its ranks.

clayton.hirst@independent.co.uk

Jason Nissé is away.

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