Sir Terry Leahy is a legend in grocery. He grew Tesco from a retail contender to an all-conquering giant, pioneering initiatives like Clubcard and online shopping along the way. When he finally retired on his 55th birthday in 2011, after 14 years in charge, Tesco was the third biggest retailer in the world. So when Sir Terry talks, people in the trade listen.
So when it emerged he was a guest on Desert Island Discs, the industry gathered round the radio to listen.
The choice of music was benign. Early Beatles, Cat Stevens, Handel. But one quote stood out. Discussing the negative impact of Tesco on the UK’s troubled high streets, and whether boarded up shops made him feel sad, Sir Terry said: “It is part of progress. People are not made to shop in supermarkets, they choose to shop there.”
Given the parlous state of the nation’s high streets, the collective efforts going on up and down the country to restore them to their former glory, and the unpopularity of Tesco for, as many would argue, making a major contribution to the situation, lots of listeners will have gasped at this casually arrogant comment. Especially if they work in Tesco PR.
After all, it’s not been an easy couple of years for Tesco since Sir Terry left the building. Philip Clarke has had a tough time of it, lurching from one disaster to the next, not least having to reveal Tesco’s first profit warning for 20 years. But after a solid Christmas, great new fun TV ads, and analysts predicting that Clarke might have turned the corner, this gem from Sir Terry reminded everyone that there is another side to Tesco.
It also bought a swift response from ACS chairman James Lowman, who dissected Tesco’s tactics over the years to explain why not everyone is as keen on Tesco’s rampant expansion as Sir Terry.
“Sir Terry’s analysis is wrong,” said Lowman. “He spent years building more and more out of town sheds, ripping the heart out of town centres. Yet today, many consumers don’t want these out of town sheds. Consumers want to shop little and often in high streets and convenience stores, and they want to shop online. Blustering about small retailers not keeping up with consumer trends hides a more inconvenient truth for Sir Terry - the sheds he built are becoming obsolete as well as soul-less and depressing.”
Lowman continues: “Why does all this matter beyond a spat about comments made, after all, on Desert Island Discs? It’s because there is a powerful big business lobby peddling an argument built on the fallacy articulated by Sir Terry. They argue that town centre first planning laws, progressive business rates policies and the now-established Grocery Ombudsman are Government interventions that go against the way consumers are voting with their feet. Sir Terry stating as fact that consumers are favouring large stores when, in fact, they are not, is more significant than just tough talk and posturing. It’s fundamentally misleading and potentially damaging for small stores and high streets.”
Given the current state of the high street - more damage is the last thing they need.
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