retail news in context, analysis with attitude

• In London, the Sunday Times reports that Tesco CEP Philip Clarke says that he plans to respond to declining same-store sales in the UK by spending the equivalent of more than $600 million to renovate stores and hire additional employees.

“What we’ve seen over time is Tesco’s underperformance against the market in like-for-like terms -- the lifeblood of the retail business, the real measure,” Clarke is quoted as saying. “I want to put that right.”

Meanwhile, the Observer reports that Tesco is facing some tough problems, mostly because of declining store standards that have resulted from pushes for greater productivity from fewer people, and a sense that it has cut too much from store budgets to live up to its reputation.
KC's View:
Yet another example of how companies - even great companies like Tesco - can get sidetracked by misplaced priorities. From the days of Ian Lord MacLaurin through the tenure of Sir Terry Leahy, Tesco was a constantly evolving company with an eye trained on consumer needs and desires as well as operational efficiencies. But sometimes, those priorities can get out of balance ... and a reputation decades in the making can quickly begin to suffer. It is up to Clarke to move quickly to plug the holes and get Tesco back on course.