‘Big Four supermarkets too focused on each other’, claims former Tesco executive

A former senior Tesco executive launched a veiled attack on the supermarket’s boardroom and its current performance, claiming that bosses have been too focused on margins and not enough on customers.

Its former finance director, Andrew Higginson, added that Tesco must rebuild its relationships with suppliers following the scandal of a £250m black hole in its accounts relating to supplier payments, as a fifth executive was suspended.

He said: “Tesco has been a weak player in the last few years and that has made the industry a weaker business.”

Mr Higginson, who left Tesco in 2011 and will start as Morrisons’ chairman next year, added that the industry needs to rejuvenate relationships with its suppliers. He added: “We need our boardrooms to have less hubris and to be more honest about the job the company is doing for its customers.”

His comments come as Tesco suspended a fifth executive as part of the ongoing investigation by Deloitte and law firm Freshfields, which is focusing on thousands of emails sent by the supermarket’s buying team to suppliers. The commercial director Kevin Grace was removed on Monday alongside the suspended UK head Chris Bush, UK finance director Carl Rogberg, food commercial director John Scouler, and head of sourcing Matt Simister.

Mr Higginson, who was speaking at the IGD conference in London, also warned that the Big Four supermarkets – which also include Asda, Sainsbury’s and Morrisons – had focused on the wrong areas. He said: “Management teams often seem to be focused on the wrong thing. Too much of the industry has raised prices to widen margins. Aldi and Lidl haven’t got any cheaper, it’s that the supermarkets have got more expensive. Supermarkets haven’t focused on customers, or Aldi or Lidl, or Poundland. They’ve been very focused on each other.”

Tesco’s new boss Dave Lewis is expected to launch a full-scale price war against its competitors when the investigation is complete. The latest suspension will continue to raise questions over chairman Sir Richard Broadbent’s position, with the Wall Street Journal saying he will consider stepping down after publication of the report. He was given some breathing space following the appointment of two heavyweight non-executives on Monday and shares closed up 3.3 per cent at 182.6p.