David Prosser: Tesco boss picks wrong moment for debut, but no problem with his form

 

Outlook It would seem we need to add an impeccable sense of timing to the endless list of attributes of Sir Terry Leahy, who bowed out as chief executive of Tesco in March. In quitting when he did, Sir Terry avoided having to unveil what were Tesco's worst results in around two decades yesterday, at least on the crucial measure of UK like-for-like sales. Has Philip Clarke, Sir Terry's successor, really managed to blow his legacy in the space of six short months?

Of course not is the answer, tempting though it sometimes is to look at companies' performances through the prism of personality. For one thing, Mr Clarke is a chip off the old block, hand-picked by Sir Terry to continue Tesco's march towards world domination. For another, Tesco's first-half performance was not as bad as some would have you believe – a 12 per cent increase in profit anyone? – and many of the problems it did have were macro issues.

Above all, it's the economy,stupid. The slowdown in the pace of recovery we have seen this year has hit Tesco particularly hard in two ways. First, as grocer of choice to the squeezed middle, it has seen customers move towards thediscount supermarkets at one end and to the premium marque,Waitrose, which has smartened up its pricing, at the other. Second, grocers are generally defensive plays during difficult economic times (people don't stop buying food), but Tesco's huge non-food sales make it less of a grocer than any of its rivals. As a result, it is much more vulnerable to pressures on household incomes.

The good news for Tesco shareholders is that the position of strength from which it starts gives Mr Clarke more room for manoeuvre than everyone else. The Big Price Drop campaign it launched last week – though subject to the normal arguments about grocers' smoke and mirrors acts – looks to be a pretty ruthless response to mounting threats to its core UK business. Also, the new chief executive has honed Tesco's international portfolio already, though the jury remains out on Fresh & Easy in the US.

Against all that, there are some questions to be addressed. On the core food offering, there is just a sense that Tesco has taken its eye off the ball during the past couple of years and needs to sharpen its act. The problems in its banking division alluded to yesterday are uncharacteristically sloppy and appear to be hindering the roll-out of the next stage of an increasingly important business for Tesco. And Fresh & Easy, though making progress, is still losing money. There is plenty of room for Mr Clarke to make his mark.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before