For many years they have been the face of supermarkets in Britain, with the simple slogan ‘every little helps’ – but the team at The Speaker take a closer look to see if the same can still be said after the supermarket giant has been recording a loss in sales for the last 3 years , which lead to chief executive Terry Leahy to step down before his 14th anniversary at the supermarket chain.
Sir Terry had been in charge at Tesco from 1997 to 2011, where he had built the retailer into the worlds third largest retailer – but since Mr Leahy’s successor (Philip Clarke) has come, he has oversaw 3 years of falling sales in the UK, in the 1st week of June this year Tesco reported a 3.7% slide in like-for-like sales it’s worst quarterly figures for 40 years.
In Sir Terry’s time in charge in the 14 year period, Tesco was known as one of the supermarket heavyweights – and with Tesco stores on every street corner it seemed, ‘the machine’ that was Tesco was ever growing. Ventures into the clothing market followed where the supermarket had stores which didn’t sell groceries and only sold clothes, a Tesco mobile network has expanded where the price of their mobile phone tariffs were beating more known competitors like o2 and Vodafone in some areas.
A venture into the USA followed for the ever expanding supermarket, despite many a public protest of the rate of growth of Tesco and that ‘there were to many stores in our city’, the supermarket pursued with their plans never the less. The Tesco brand seemed to be going one way – and that was up.
Unfortunately for Tesco the venture in America didn’t take off – and back home discount supermarkets Lidl and Aldi were closing the gap on their bigger rival. With the UK in a recession both retailers based their marketing on saving the ‘customer money in troubling times’. Aldi with their very aggressive ‘swap and save advertising’ really starting have an effect on Tesco.
With political turmoil in The Middle East, Tesco’s stance on buying products from Israeli manufacturers left a few customer unhappy – which lead customers to go to other supermarket stores who opted to not make such a stance. Whether it be good business sense or a genuine humanitarian decision Tesco could have potentially seen the effects of making such a stance.
In efforts to improve their fortunes, former Unilver turnaround specialist Dave Lewis will be starting on Monday 31st August 2014 ( a month earlier than planned). Lewis succeeds Philip Clarke who quit in July shortly after issuing his 2nd profit warning.
Tesco’s new boss could bring in measures such as bringing in a chain to compete with discounters, one to target the mid-market sector and a third to challenge the up market sector. Tesco has been the face of the Uk supermarket for some time – but has lost ground on it’s rivals in the discount retail sector, how ironic is it that Tesco’s former chief executive left Tesco and joined rivals B&M a year later in 2012. They say ‘if you cant beat them join them’ and in Sir Terry Leahy’s case that seems to be the case.