Lewis can turn round Tesco but don’t expect profits to fly off the shelves soon

Agenda

There is rejoicing among retailers suffering from weak autumn trade.

No matter how much they are struggling – in clothing because of the Indian summer that made coats and winter boots hard to sell, or in food because of the continuing price war – Tesco will always draw the eye. Britain’s biggest and once- unstoppable supermarket has been falling faster than the rest.

Next week we find out two things: is trading getting worse under Dave Lewis, the chief executive at the eye of the corporate storm? And in the seven weeks he’s had at the helm, has the former Unilever man formed a plan of action?

The latest sales figures are bound to be uninspiring, but investors will look beyond that. The City needs a decent diagnosis of the patient alongside Tesco’s delayed half-year figures – if not the bones of a new strategy to tackle the discounters.

Will next Thursday be too soon for the classic kitchen-sinking, given that the new numbers man Alan Stewart has only had a month to hunt around for impairments?

It would be a surprise if Mr Lewis is able to draw a line under the recent accounting scandal, which uncovered the mis-reporting of supplier payments and has seen a slew of executives suspended and confidence melt.

With all the exits, he needs to find some fresh blood to join him, to do for the executive committee what the arrival of the solid Richard Cousins, the Compass catering boss, has begun to do for the plc board.

What Tesco is now worth is interesting. Clive Black, a retail analyst at Shore Capital, calculates that the core UK chain is virtually thrown in for free given the group’s lowly stock market value. However, there is Tesco’s creeping debt pile and pension deficit to factor in.

No incoming boss should fail to let a good crisis go to waste – although it was Steve Elop at Nokia who talked about a “burning platform”, only for the mobile phone maker to end up as a pile of ashes swept up by the Microsoft empire.

I still believe Mr Lewis has the big-picture thinking and charisma to do for Tesco what Justin King did at Sainsbury’s. But it’s worth remembering that Mr King had to lower expectations before be raised them again. He slashed the dividend and margins to rebuild the business – a task that the under-fire Tesco chairman Sir Richard Broadbent has begun. And, for anyone expecting fast results from Mr Lewis, it took Mr King the best part of a decade to fashion what was for a time Britain’s best-performing supermarket.

Clinton’s education initiative risks failing its practical

Bosses were queuing up to declare their good works at the Business Backs Education summit at London’s City Hall on Monday. Xavier Rolet from the London Stock Exchange, Richard Reid of KPMG and Blackstone’s Jitesh Gadhia were among the crowd answering the call of Bill Clinton’s latest initiative.

In the way that only former US presidents can, Mr Clinton is asking the private sector to commit at least 20 per cent of its corporate social responsibility (CSR) budgets to education by 2020, prioritising countries most in need. The proportion was about 9 per cent in the British companies it surveyed, the Business Backs Education campaign said. Taking it up to 20 percent would turn $307m (£191m) of spending into $650m.

Two questions arose in my mind. If education gets a larger slice of firms’ giving, then what gets less? True, better education can ease healthcare constraints if it means fewer youth pregnancies, for example, but it is not a zero-sum game. And companies prefer to help students in their neighbourhood, not thousands of miles away in developing countries.

One chap wasn’t happy. A headteacher listened intently to all the well-meaning community-engagement officers reeling off how many staff they dispatched into local classrooms to help with reading in their lunch break, and the internship programmes they had put together to train the next generation.

“I don’t want your time,” he said over salmon and risotto, “I just want your money.”

It’s true that at 46 per cent, the largest chunk of CSR spending comes from in-kind donations, and in Britain in particular that means a lot of volunteering. Cold, hard cash contributes only one-fifth of the total. The teacher had written to more than 60 companies asking for money and sounded surprised when just three responded, and then only to decline his offer of lunch to discuss how they could help plug the gap created by state spending cuts.

Of course companies will use outreach programmes to feel better about themselves – they are not totally altruistic. Simply handing over a large cheque misses the point somewhat.

Are we finally going to see the bidding up of salaries?

Lunch with a recruitment boss contained an interesting revelation: the counter-offer is back.

There are three steps to a healthy jobs market. First of all, companies need the desire and budget to expand their workforce. Second, job candidates must have the confidence to jump ship. And third, the competitive tension must be there that encourages one firm to bid up the offer made to a member of their staff in order to keep them.

The jobs market has been far too slack for such cut and thrust, in all but a few sectors such as IT and compliance. My friend said it was starting to seep into a few more industries. It is about time.

Britain is awash with the working, as unemployment sinks close to a six-year low, yet some companies still complain of a skills drought. Is it worth the risk of testing out the price of loyalty?