Every little help: Only smart management can reverse Tesco's sharp decline

The British have a strange relationship with their largest retail group. Even after its recent travails, culminating in a record-breaking loss of £6.4bn, about one pound in every three the British spend on their groceries makes its way through a Tesco till. And yet, as much of the coverage of its various scandals and setbacks demonstrates, many people seem to want to dance on its grave – often the same people who might pop in to a Tesco Metro on their way home for a ready meal and a bottle of wine.

It seems not to be a business people love, and with some reason. Tesco, it has been alleged, deals harshly with some of its suppliers, and confronts local communities who object to having a Tesco landing on their high street, ready to destroy smaller rivals. The Competition and Markets Authority, which recently announced an inquiry into the commercial habits of the major supermarket chains, is only the latest to want to give Big Retail a kicking.

So, from making far too much profit, Tesco is now making far too big a loss. The truth, of course, is that some of its earlier profits were to an extent overstated, but they were also healthy because Tesco had such a sure touch for retail trends, including, some years ago, the fashion for mega-stores, complete with clothing sections and opticians.

The arrival of Aldi and Lidl, the appeal of Waitrose to the well-heeled, and the growth of smaller convenience outlets left Tesco a little wrong-footed. Then again, Tesco is actually attracting more custom, albeit at the expense of margins and profitability. So it is doing what every business in its position must do: writing off past mistakes and doing its best to rebuild consumer loyalty and to offer something more than mere ubiquity. In recent months it has had quite a few “unexpected items in bagging area”. Its suppliers, management, staff and investors must hope they have all now been dealt with.