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.
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Emergency landing at Heathrow sparks further controversy over London airport capacity
Two bailed after arrest over Woolwich attack Twitter comments
Exclusive: Woolwich killings suspect Michael Adebolajo was inspired by cleric banned from UK after urging followers to behead enemies of Islam
Men arrested after RAF jet is scrambled to escort Pakistan Airlines passenger plane to London Stansted Airport
- 1 Liam Gallagher slams Daft Punk: 'I could have written Get Lucky in an hour'
- 2 What, let gays get married? We must be bonkers
- 3 'Something passed underneath us, quite close': Airbus A320 has close encounter with UFO
- 4 Lord of the Sings: Sir Christopher Lee, 91, to release heavy metal album
- 5 Two bailed after arrest over Woolwich attack Twitter comments
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.