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
Life and Style
Google celebrates the 126th anniversary of the Eiffel Tower opening its doors to the public for the first time
techGoogle celebrates Paris's iconic landmark, which opened to the public 126 years ago today
News
Cleopatra the tortoise suffers from a painful disease that causes her shell to disintegrate; her new prosthetic one has been custom-made for her using 3D printing technology
newsCleopatra had been suffering from 'pyramiding'
Life and Style
Baroness Lane-Fox warned that large companies such as have become so powerful that governments and regulators are left behind
techTech giants have left governments and regulators behind
News
people
Arts and Entertainment
Coachella and Lollapalooza festivals have both listed the selfie stick devices as “prohibited items”
music
Sport
Nigel Owens was targeted on Twitter because of his sexuality during the Six Nations finale between England and France earlier this month
rugbyReferee Nigel Owens on coming out, and homophobic Twitter abuse
Arts and Entertainment
Tracey Emin visits her 1990s work ‘My Bed’ at Tate Britain in London, where it is back on display from today
artsBut how does the iconic work stand up, 16 years on?
ebooks
ebooksA special investigation by Andy McSmith
  • 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: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor