Former Tesco chief executive Sir Terry Leahy has slammed the direction his successor, Philip Clarke, took the supermarket in, saying its subsequent demise was a “failure of leadership” and that he neglected to “take the pulse of the customer”.
“People tried very hard to do the right thing, it clearly has not worked. In the end that’s a failure of leadership, not a failure of the business, not a failure of the people who work hard every day in the business,” he told the BBC for a Panorama documentary titled ‘Trouble at Tesco’, which aired yesterday (19 January).
Leahy stepped down in 2011 after 14 years at the helm. Clarke took the reins during a period which saw the swift rise in popularity of discounters such as Lidl and Aldi and a £263m accounting scandal which sent shockwaves throughout the industry.
Clarke was subsequently dismissed ahead of his planned exit and current chief executive Dave Lewis parachuted in to implement a drastic plan for its resurrection.
Leahy continued: “When you’re the CEO , if it goes well you get credit, if it doesn’t go well you must take responsibility and Phil Clarke has taken that responsibility and paid the price with his job.
“For whatever reason my successor went in a different direction and I think, it may or may not have been with the right reasons or intentions but it clearly didn’t work.”
He added that Tesco has since failed “to take the pulse of the customer” amid the rise of discounters such as Lidl and Aldi to “know what they need today and be prepared to change and innovate in order to respond to customers’ needs now.”
Leahy also claimed that by failing to deliver the best price, trust in Tesco has been eroded which has been “very damaging” for the brand.
“Some of that trust has been eroded which has meant that people have shopped around, not just actually from Tesco.”
Meanwhile, Clarke defended the direction he took the supermarket in and said others “who remain silent out of loyalty” would agree.
He said in a statement: “Although the company had enjoyed unprecedented success in the past, it was plainly the case when I took over Tesco in 2011 that it faced a number of critical challenges that had been building for some time. In bringing about business and cultural change within the company, inevitably some executives who were not considered to have a role to play in the future of the business were let go.
“There are many others who remain silent out of loyalty to the company and who would describe Tesco under my leadership very differently.”