Simon English: Tesco pays the price of Sir Terry's over-ambition
Thursday 18 April 2013
Outlook Should Tesco investors sue Sir Terry Leahy?
If this were America – let's be glad that it isn't – they probably already would have.
Sir Terry's final, hubristic act as boss of the supermarket was to lead a charge into the US, presumably on the assumption it is a nation desperately short of food, where folk just don't eat enough.
The line spun by Tesco to UK hacks and analysts – with some success – was that US supermarkets are no good. Tesco would show them how it should be done. That's got to go down in history as one of the worst misreadings of a business situation ever.
In theory, Tesco did masses of research before making the leap stateside, but it's hard to see that this research was objective, otherwise they'd have noted that lots of US supermarkets are better than ours and that Wal-Mart is quite a handy retailer and may have already spotted such opportunities for expansion as there were.
Instead, presumably, the executives dispatched to America to compile data looked for evidence to back-up what Sir Terry had already decided they were going to do anyway.
The end of Tesco's tale of over ambition came yesterday with news of the writedown for the losses in America. About £2bn in all.
Now if a banker had lost that much of shareholders' money, there's little doubt in the present climate that there would be calls for retribution of some sort.
A class-action lawsuit perhaps. The return of the knighthood.
Tesco might say that Sir Terry acted in good faith. But then, so did Fred Goodwin.
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