It’s been stormy weather pretty much all the way for Tesco CEO Philip Clarke since taking over from the legendary Sir Terry Leahy in March 2011. The Grocer looks back at some of the ups… and the downs.
Tesco announced today that Philip Clarke was stepping down as CEO after three years in the top spot - and four decades with the retailer. What was his legacy?
Sir Terry Leahy steps down in February 2011 as chief executive after 14 years in charge, during which time Tesco's pre-tax profits soared from £750m in 1997 to £3.4bn in April 2010. His legacy includes the launch of Tesco.com, Tesco Finest and Tesco ClubCard as well as its expansion into the US with Fresh & Easy.
Former shelf stacker Clarke - who took up his first full-time role at Tesco after university - takes on the top job having worked his way up to previous roles such as Director of International and IT and Director of International Operations.
Tesco embarks on strategy to build its own powerful stable of “venture brands”, with products going on to include yoghurt brand Yoo, Italian range Parioli and Chokablok ice cream.
Clarke admits Tesco “must do better” in its home market after UK sales fall in the final three months of the year. Profits at the retail giant rise more than 12% to a record £3.8bn in the year to 26 February but Tesco relies on its overseas business to drive much of the growth.
Tesco big-hitter Andrew Higginson announces he is to leave as head of its banking arm and will step down the following year.
Tesco reveals it is to plough £500m into a new offensive that will see 3,000 products slashed in price. The Big Price Drop kicks off what many predict will be a full-scale price war in the run-up to Christmas. Tesco says slashing the price of milk, bread, fruit, vegetables and a raft of other staples to help families struggling from the impact of the economic crisis. Tesco also claims it will shift strategy away from promotions in favour of sweeping price reductions and bins its popular ‘double points’ promotion on its ClubCard loyalty scheme.
Clarke shocks the stock market with Tesco’s first profit warning in 20 years after a poor Christmas trading performance. Shares plunge by as much as 15%, or more than £4bn.
Tesco replaces Bob Robbins as UK chief operating officer just weeks after he hits the headlines for controversially selling shares in the supermarket before its profit warning. Robbins gets a new strategic role reporting directly to Clarke as Tesco veteran Chris Bush (above) returns to the UK from a stint heading up the Thai business to take Robbins’ role.
Much admired UK chief executive Richard Brasher becomes the biggest casualty of Clarke’s reign, as he pays the price for the spectacular failure of the Big Price Drop strategy. Clarke announces he will take on the role himself along with his global CEO job.
Clarke launches a £1bn UK revival plan including a huge store refurbishment programme, a company-wide training programme to improve service and a focus on delivering better value for money. Clarke also slams the breaks on the space race admitting big sheds are no longer the way forward.
Tesco will launch ‘traffic light’ labels on its products in a major U-turn that marks a significant step towards the Department of Health’s health targets.
Clarke reveals it is ”likely” the retailer will quit the US, after announcing a strategic review of its struggling Fresh & Easy chain and the immediate departure of its influential US CEO and deputy chief executive, Tim Mason, an admired Tesco veteran of more than 30 years.
Tesco takes out full-page ads to apologise after horsemeat was found in some of its beef burger products. The horsegate scandal rocks the food industry.
Tesco rocks The City again with its first fall in annual profits in 19 years, post-tax down almost 96% to £120m from a year earlier, not helped by a £1.2bn charge on its Fresh & Easy chain. Tesco also announces an £804m writedown on more than 100 planned stores which will no longer go ahead. The retailer also takes a £1.2bn writedown as it finally confirms it is exiting the US.
Clarke announces a major re-think of Tesco’s international strategy, after revealing it is going into partnership in China with the country’s leading multi-format retailer CRE.
Tesco sells Fresh & Easy to private equity firm Yucaipa. The deal includes more than 150 stores as well as Tesco’s Fresh & Easy’s Riverside distribution and production facilities in California. More than 4,000 staff transfer.
Clarke is first to show off to journalists the new £119 Tesco tablet, the Hudl. ClubCard loyalty customers can potentially purchase the device for £60 with vouchers and it becomes a hit over Christmas.
The Grocer reveals Tesco’s sales were worst hit by the slump in sales of frozen ready meals, the sector at the centre of the horsemeat scandal. The retailer suffers a 14.4% value decline, worth £14.2m in lost sales, almost as much as the rest of the big four’s combined loss of £15.9m and well over a third of the market’s overall £35.7m decline.
Tesco launches new £200m price offensive to take on the discounters with “sharper” pricing across a range of everyday products, beginning with cuts of about 25% on carrots, cucumbers and peppers. Clarke tells The Grocer it could take years for Tesco to take on the discounters on price. He also admits the store refresh programme has been too slow to take off and promises to speed it up.
Clarke promises to ramp up the price war against its supermarket rivals and the discounters, saying the £200m offensive launched the previous month was “just the start” of things to come. The move comes as the retailer announces second year in a row of falling profits, with UK like-for-like sales down 1.3% and group profit of £3.3bn, down 6%.
Clarke reveals Tesco will open more than 100 Giraffe, Decks and Harris+Hoole restaurants and coffee shops as part of plans to accelerate its UK store turnaround programme, following last year’s launch of pilots in Watford, Purley and Coventry. He also reveals plans to increase the number of gyms on mezzanine floors of its large Extra stores, as it seeks to create destination locations and dramatically shrink the amount of general merchandise retail space.
Tesco reveals it is scrapping sweets and chocolates from all tills across the UK and the Republic of Ireland in a bid to help customers make “healthier choices”. It becomes its latest move in pledges to use its Scale for Good to tackle obesity, the environment and opportunities in the workplace.
Tesco completes the deal to combine its Chinese retail operations with China Resources Enterprise.
Tesco blames the impact of its price cuts and accelerated programme of store revamps for its third successive quarterly fall in like-for-like UK sales, as Clarke admits the climate is the worst he has seen. Later that month chairman Sir Richard Broadbent asks shareholders to give the management more time to complete their turnaround plan and says he will resist moves for an all-out price war despite the “momentum” of rivals Aldi and Lidl, which he says would be a “strategy of decline.”
Tesco begins roll out of dozens of collection points at business parks outside London. It follows trials at six Tube stations in London and pilots at schools, libraries and sports centres in York, London and Scotland.
Tesco announces Clarke will step down from the board on October 1 to be replaced by Unilever veteran Dave Lewis. Broadbent admits Tesco’s forecasts are “more challenging than we anticipated” and says it is time for new leader with "fresh perspectives". A party this week at which Clarke was due to celebrate his 40 years at Tesco is reportedly cancelled.
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show captionIt’s been stormy weather pretty much all the way for Tesco CEO Philip Clarke since taking over from the legendary Sir Terry Leahy in March 2011. The Grocer looks back at some of the ups… and the downs.
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