Inside This Issue - Opinion
Tesco’s Leahy to pass on an impressive legacy
July 12th, 2010
Throughout his tenure as chief executive officer of Tesco PLC, Sir Terry Leahy has consistently demonstrated the ability to look beyond the immediate challenges of running a global retailing empire and address its long-term needs.
So it is with his pending departure, which will come next March after 32 years with the company, 14 of them as CEO.
With last month’s announcement that Philip Clarke, who is currently in charge of Tesco’s operations in Asia and Europe as well as its information technology program, will become chief executive, the retailer initiated what promises to be an orderly transition, one that should ensure that Leahy’s vision of building the business around the needs of customers will remain the guiding principle long after his departure.
The legacy that Leahy will leave behind is formidable. The driving force behind the development of the company’s Clubcard loyalty plan (a game-changer in the United Kingdom, Tesco’s home market), Leahy has always kept a sharp eye on consumers and how the retailer can do a better job meeting their changing needs. Shoppers in Great Britain and around the world have recognized that orientation and responded enthusiastically, propelling Tesco in its pursuit of new products and services, new formats and new markets.
Throughout the Leahy era the company has grown and prospered. When he took the reins in 1997 the retailer operated 758 stores in the U.K. and five other nations; today it has 4,811 outlets in 14 countries. Sales have risen to £62.5 billion from £14.98 billion, and pretax earnings have quadrupled to £3.18 billion from £750 million. Even as Tesco has accomplished all that, it earned a reputation for nurturing employees, working to make sustainability a reality and running its business ethically.
One potential blemish on Leahy’s record is the company’s move into the United States, where its Fresh & Easy chain has found it much more difficult to make a significant impact than is usually the case when Tesco enters a market.
The jury is still out, however, and even if Fresh & Easy ultimately fails to live up to expectations, the venture will be the exception to the rule at Tesco.
When asked why he chose this time to step down Leahy indicated that he’s done the job he set out to do. One might add that he’s done it very well indeed.