Asda boss compares Tesco accounting scandal to ‘Horsegate’, saying reputation of whole industry has suffered
Asda chief executive Andy Clarke has expressed concern for the reputation of the grocery industry as a whole after the Tesco accounting scandal which saw it overstate profits to the tune of £263m.
In an interview with the Telegraph, Clarke said he expected its rival to "bounce back" but added that consumer trust has been impacted across the sector.
He compared it to the horsemeat scandal which came to light in early 2013. Tesco was among a number of major supermarkets – including Aldi, Iceland and Lidl – who were forced to withdraw products after horse DNA was found in the meat.
"The things that have been reported, however right and wrong, are a little bit like Horsegate for the industry. It has an impact on consumer trust, which isn't good for anybody,” he said.
"So even if you are a retailer dealing with things in the right way, which we would say we are, that is still going to reflect on the reputation the industry. For me that is a much greater concern.”
Clarke also discussed the future of the grocery industry following a turbulent year for the ‘Big Four’ supermarkets, caused partly by the rise in popularity of discount chains like Aldi and Lidl and the changing shopping habits of consumers.
He predicted there will be consolidation in the industry and that some well-known retail brands could disappear.
"There are fewer retail fascias on the landscape today than 10 years ago, even three years ago. If you look forward 10 years I am pretty sure there will be fewer again. Making a call on who is, of course, the big question. But I am sure there will be further consolidation.
"I do feel that will be driven by the restructuring that started in 2013 – principally the growth of online sales and the growth of the discount sector, which is a growing at a phenomenal rate. That is going to have an impact on the overall consolidation for the market,” he said.
He also said that one of the biggest challenges for larger stores is rethinking how space is best used.
“I think we will see a greater number of partnered superstores and supercentres where the opportunity comes from reducing the space that any one retailer can have. It is certainly something that we are working on already," he revealed.
Tesco was among the brands The Drum noticed for the wrong reasons in 2014 - take a look at the others which made it into the New Year Honours.