• The Financial Times reports that Tesco is under pressure from some of its biggest shareholders because of disappointing sales numbers, with the story suggesting that “the culture of Tesco ... became over-centralised during Sir Terry Leahy’s 14-year reign as chief executive. The shareholders believe this culture could hinder efforts by Philip Clarke, the new chief executive, to boost the company’s performance.”
- KC's View:
- I find this fascinating. I’m old enough to remember when Tesco was a shambles, a stack-it-high, sell-it-cheap retailer for which discipline was an afterthought. The company became a powerhouse when Sir Ian MacLaurin took over the company and imposed a high level of centralization and discipline, a tradition that was continued by Leahy ... though Leahy also was smart enough to know that things like retail theater, disdained by MacLaurin, were important to the shopping experience.
I guess I just think that shareholders focused on short-term results should be careful what they wish for. I’m not sure what Tesco should do in term of a course correction, but I think it certainly has to be careful not to abandon the core values that made it a global retailing powerhouse.