Lord MacLaurin tells Tesco investors to give struggling Philip Clarke more time

 

Struggling Tesco chief executive Philip Clarke received a much-needed boost yesterday as former boss Lord MacLaurin insisted shareholders should give him more time to reverse the supermarket’s fortunes.

His comments come three days before Mr Clarke is due to face hostile questions from investors at the annual general meeting and a year after Lord MacLaurin launched a scathing attack on Clarke’s predecessor, Sir Terry Leahy.

Lord MacLaurin admitted Mr Clarke was struggling now more than ever and laid the blame for the current failures squarely at Sir Terry’s feet.

He said: “I think Philip is under more pressure this year but it will take at least three years to turn Tesco around. The City is very short term and he needs some time to do it. I stand by what I said last year: the judgment of a good chief executive, and I’m not just talking about Terry, is how he leaves it for his successor. If you’re a good chief executive, you have to leave it in good shape, otherwise the incumbent has an uphill task.

“When Terry left Tesco he had left a US business that was wasting huge amounts of money and an underinvested UK business. Of course, it is going to be tough for Philip. I know from experience how long it takes to turn the business around.”

Lord MacLaurin, who was chairman of Tesco for 12 years until 1997, said last year that Sir Terry, chief executive until 2011, had “lost the plot” over his decision to invest in the US and focus heavily on international expansion at the cost of UK investment.

Earlier this month, Sir Terry made his first public comments about the current state of Tesco and said he was “very disappointed” by the Clarke era.

Last month Tesco revealed its worst trading performance for 40 years and promised to spend £200m to cut prices. It is joining a price war that has seen rivals Asda and Morrisons spend hundreds of millions of pounds. Sainsbury’s will join the throng after striking a joint venture with Netto that will see the discounter reintroduced to Britain.

Lord MacLaurin said he has no plans to attend Friday’s meeting to make his feelings known directly to Mr Clarke, meaning there are likely to be few supportive voices for the incumbent boss who has seen customers desert Tesco in droves. His no-show is at odds with the former chairman of rival Morrisons, Sir Ken Morrison, who called the supermarket’s current strategy “bullshit” at its meeting recently.

Both supermarkets have lost out the most to the rise of discounters Aldi and Lidl, but Lord MacLaurin insisted that every retailer is feeling the changes.

“You’ve got to put this into context – Tesco is a huge business and the retail business  is changing enormously,”  he said.

“Everyone is suffering and trying to manage themselves through this period.”

Shareholders have already been critical of Tesco, leading to the departure of finance director Laurie McIlwee. He announced his exit after being attacked for promising to stick to unrealistic high margins, rather than cutting prices to challenge the discounters.

Analysts have warned that Tesco’s turnaround attempts are too ambitious and unachievable. However, Mr Clarke is expected to tell shareholders that the company is on track for recovery.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent