Sir Terry Leahy 'shocked' by events at Tesco since he left supermarket giant

Former Tesco boss says grocer lost sight of its customers

Sir Terry Leahy had a 33-year career at Tesco, during which he turned it into the world's third-largest retailer (Reuters)

Sir Terry Leahy said he is “shocked” by the turn of events at Tesco since he stopped running the supermarket group three-and-a-half years ago.

Speaking at a London Evening Standard Business Connections event, the former chief executive said “Tesco had lost sight of its customers”.

He added that, although it is always important for a retailer to keep in touch with its clients and give them what they want, it is even more vital when the retailer occupies the middle ground between specialist discounters and upmarket rivals.

Leahy would not be drawn on the accounting scandal that has hit Tesco’s senior management, and concentrated on the bigger picture for the group.

He said that the City and commentators had not appreciated the depth of the recession — “longer than anyone predicted” — and the effect it had. It’s only now, with wage rises moving ahead of inflation, that supermarkets can look forward to a general upturn.

Leahy rebutted suggestions that Tesco had grown “too big” during his reign, and he defended the company’s international expansion which included the setting up of Fresh & Easy in the US — only for it to be offloaded by his successor, Philip Clarke.

Leahy said he still believed that, given time, Fresh & Easy would have been a good business.

The former Tesco boss is chairing B&M, the quoted Liverpool-based discount chain that is expanding rapidly and now has more than 400 stores.

If B&M continues to grow apace, it could soon enter the FTSE100. Leahy is clearly relishing having returned to his old supermarket stamping ground. He’s also turned into something of a one man Dragons’ Den, backing 20 start-ups.