If I ever have a rough day at work I often cheer myself up by thinking, well, at least I’m not Philip Clarke.
Sure, I wouldn’t mind the Tesco CEO’s £1.14m salary, and I admire his rumoured predilection for staying at top quality hotels when travelling around Tesco’s global empire (“It’s got to be the Mandarin Oriental” gossiped one senior executive after a couple of vinos the other night).
And Monday morning must have made a pleasant change for Mr Clarke, who woke up to the news that some analysts had decided that Tesco, with 28.9% of the grocery market, profits of £3.3bn a year, and a share price that has slumped so hard that it’s fast looking like a bargain, wasn’t such a bad bet after all. Cantor’s Mike Dennis even double upgraded from SELL to BUY.
Then someone had to go and spoil things and remind us why, at times, leading Tesco must make the boss want to sit in a corner and comfort eat his favourite sushi.
According to the Daily Mail, Tesco was selling 300g packs of New Zealand lamb chops for £6 yesterday, a saving of around 30%, as well as some multi-buys on leg steaks. A bonus for anyone planning chops for dinner then, but sheep farmers were apoplectic because Spring and Summer is the peak season for British lamb. It’s when it is at its tastiest and, unlike the rest of the year, there is plenty to go around. So why offer a deal on imports?
In a measured response, NFU president Meurig Raymond told the Mail its members were “upset and angry” by the promotions. He wasn’t against imports per se, he added, but that the NFU could see “no reason to promote foreign lamb above our own.”
It could be argued that, as a retailer, Tesco can sell what it wants, at a price it chooses, whenever it fancies. But to complicate the matter, less than 18 months ago Philip Clarke stood up in front of the NFU and announced “a sincere commitment to source more of our meat closer to home”. It hasn’t exactly done the opposite by price promoting imports, but it’s unlikely that running a deal like this is what he intended at the time.
That said, rather than Tesco going back on its word, or at least the sentiment of what it expressed, it’s likely this promotion is another example of Tesco’s sometimes unwieldy and disjointed organisation failing to join the dots. It’s not going to turn into Lambgate. And it’s unlikely to happen again. Indeed, a Tesco spokesman hurriedly told the Mail a similar promotion would soon take place on British lamb, although “in the next few weeks” was as specific as he could be for when it would begin.
It will be “half-price” though. And there are plenty of squeezed shoppers out there who couldn’t give a monkeys where their lamb comes from. They just want affordable lamb they can put on the table. And Tesco is delivering that.
In short, it’s another challenging week for Philip Clarke, featuring the highs and lows of happy analysts and furious farmers. And it’s only Wednesday.
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