Tesco shareholders demanding Clarke's head don't realise times have changed

 

Outlook The City's wolves are baying for the blood of Philip Clarke in the wake of Tesco's full-year results. Small wonder: they're awful.

You can see now why details of the plan to re-enter the US with clothes stores, just seven months after its exit from the debacle that was the Californian supermarket chain Fresh & Easy, emerged a couple of days ago. It offered the chance to create a little bit of good news before the fall of the hammer. Hey, look – we're doing things!

Good news is in desperately short supply for this business. For more than a decade Tesco was as reliable as a Volkswagen car. After the second straight year of falling profits and an accelerating decline in like-for-like sales, it now looks more like a clapped-out Lada.

The buck for that stops with Mr Clarke. Rightly so, you might think, given what he gets paid.

But would changing the biggest deckchair atop the Tesco Titanic do much to pep up its fortunes? That's open to debate.

There is an uncomfortable fact facing Tesco and the Clarke-out brigade among its investors and it won't change whoever occupies the chief executive's office.

They must simply get used to making do with less.

The British shopper has had to get used to this during the past six years and they're increasingly unwilling to use their limited supplies of hard-earned cash to keep Tesco's shareholders in the style to which they have become accustomed. Why should they? Especially now there are so many discounters out there bearing gifts.

It isn't just Aldi and Lidl, either. Poundland and pals also stock lots of cheap groceries these days.

That Mr Clarke was slow to realise this could be seen in the super-duper margins he was targeting but has now dropped. Targets that were cheered in the City.

To be fair to the Tesco boss, he has also called time on the self-defeating supermarket space race by pledging fewer new store openings, while trialling some interesting ideas out in the group's unloved hypermarkets – such as installing soft play venues that children love and renting out space to other retailers. These may help to stabilise some of the decline, but it's very much a case of papering over the cracks.

If Mr Clarke were really bold he'd plant his flag in front of the massed ranks of his shoppers and say "yah boo sucks" to his shareholders. He'd tell them the customer is king and they will have to live with the consequences of that. Which might include their accepting a cut-price dividend. Tesco pays half of its profits out at the moment and that may not be sustainable if it wants to win its lost customers back.

Shareholders would benefit from Mr Clarke taking such a step in the long term. Some of the sharper ones realise this. They will have worked out by now that their company isn't ever going to get back to the salad days it enjoyed under Sir Terry Leahy when one pound in every seven spent by shoppers went through Tesco tills. The market has changed dramatically.

Unfortunately, a bloodied and bruised Mr Clarke may now lack the courage to go further than he's already gone – even if the majority of his investors were bright enough to let him do so. Given the siren calls for his head, it doesn't look as if they are.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Voices
Ed Miliband, Nick Clegg and David Cameron appeal to the audience during the Question Time special
voices
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Sport
football
ebooks
ebooksA celebration of British elections
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
News
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
news
News
Michelle Dockery plays Lady Mary in Downton Abbey
peopleBut who comes top of the wish list?
News
Miriam Gonzalez Durantez, right, with Lib Dem candidate Jane Dodds in Newtown, Powys, as part of her tour in support of the party’s female candidates
general electionNick Clegg's wife has impressed during the campaign
  • 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

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...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

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
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
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