Chris Blackhurst: It’s the end of the world as the City knows it when Tesco comes up short

My Week

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The Independent Online

One word towered over everything this week. Tesco.

On Sunday, we went to bed thinking that while Tesco had its problems, it was still a giant of a company, far and away our biggest retailer, a monster of a machine that would soon correct itself and continue on its relentless path. On Monday morning, we realised we were mistaken.

I’ve seen some shocks in my time covering business but Tesco’s announcement that its profits were overstated and four executives had been suspended takes some beating. That was the theme, when, later, I met a senior City PR adviser.

He could talk about nothing else. It wasn’t so much what had occurred but where. Tesco! It was as if his whole world was rocked, that nothing would ever be the same again. A corporation that he’d clearly admired hugely, that he believed set the standard for others to follow, had been found wanting. His thinking was obvious: if Tesco had been doing this, what are the others doing? In particular, what are my clients up to?

They’re laughing in the aisles

Inevitably there was a large slice of schadenfreude in the reaction to Tesco’s plight. For years it has maintained an aggressive, cold, superior stance where the media, City, politicians and suppliers are concerned.

Its tendency has been to brow-beat, always with the unspoken knowledge that it’s number one and you mess with it at your peril. I witnessed something similar with the collapse of Royal Bank of Scotland. While no Tesco chief can be accused of equalling Fred Goodwin’s at times peacock-like behaviour, there was still an element of glee in some quarters at the retailer’s woes. 

It’s not simply that we British like to see giants topple. It’s to do with warmth and friendliness. We can sense if an organisation does not care as much about us as it once did, is disdainful, and out for itself.

That feeling, which is instinctive, manifests itself in different ways – one of which, in the case of Tesco, is that we simply do not like going there as much as we once did. It’s less enjoyable, and unfortunately for Tesco, the strong competition makes it too easy to go elsewhere.

Plain and simple, Tesco’s culture has gone sour. If it is to flourish and prosper again, and recover lost ground, it requires wholesale change. From top to bottom, in attitude and approach, it needs taking apart and rebuilding. If he thought the task ahead of him was huge, new broom Dave Lewis must be under no illusion: it’s even bigger now.

When risk takers roamed the earth

Tesco was on everyone’s lips at the party for the 50th year of The Sunday Times business section. It was a generous touch by the paper’s management to extend invitations to the journalists who had worked on the section down the years. Good, too, that they chose to honour many of the surviving business stars who were once regulars on its pages.

Seeing the likes of Sir Geoff Mulcahy, Sir Victor Blank, Lord Bishop, Sir Stuart Lipton, Sir John Ritblat, Brian Basham, Sir Richard Greenbury, Greg Hutchings, David Mayhew, John Ashcroft and Roger Seelig gossiping again was remarkable. These were people for whom the phrases “compliance officer” and “corporate governance” were largely unknowns. They were buccaneers, deal makers, men (and sadly they were all men) who ran their fiefdoms in their own colourful images and had plenty of fun along the way. Looking on, I realised that much is missing from business today – that we’re obsessed by rules and regulations, and are so terribly risk averse.

Journalists leave to join the smart set

Two other aspects of the gathering did not go unnoticed: just how many of the journalists had crossed to the “dark side” of PR, and how smart they appeared – with their tailored suits, carefully knotted silk ties, expensive shirts and shoes, and fancy watches – when standing alongside the few remaining hacks.

For many, as well, it was their first time inside the new offices of News Corporation. Compared with the old premises in Wapping, they’re something to behold. Located opposite The Shard, they are impressively state of the art. No one at the party was left in any doubt as to Rupert Murdoch’s commitment to his London newspapers.

A short cut to success

A cup of coffee with Dianne Thompson before she steps down as chief of Camelot, the National Lottery operator. She’s off to run her own hotel and restaurant, The George at Yarmouth on the Isle of Wight.

Ms Thompson is a joy, never one for airs and graces, not once taking herself too seriously. She’s less than five feet tall, but reckons that will serve her well in her new career. She tells a story about a well-known restaurateur, also short of stature, who was asked for the secret of  their success:

“My height. When I walk round the tables, I’m on the same level as the diners who are sitting down. I can look them straight in the eye and build an instant rapport.”