Inside This Issue - Opinion
U.K. retail leaders on march
October 7th, 2013
by David Pinto, Editor
After a lull in positive activity, retailing in the United Kingdom is once more making news. Several events have marked the country’s rebirth as a retailing center, but two deserve special mention.
First, Alex Gourlay, the talented, experienced and personable head of the U.K.-leading Boots drug chain, is giving up that job and moving to Deerfield, Ill., as president of Walgreens’ customer experience and daily living business.
For those with short memories or little interest, Walgreens will shortly be the majority owner of the Boots retail and wholesale empire, a domain that stretches across Europe and Asia and rivals its new owner in breadth of reach and scope of operations if not yet in size. For the past two years management at the two companies have been working to create a third by merging the two. To that end, they established a separate entity last year in Switzerland to bring together some of the most talented executives the two companies have identified and use that talent as a base to create a new enterprise.
Though that enterprise is moving ahead, its scope pales in many ways when measured against Gourlay’s move to Deerfield. It was precipitated earlier this year when Joe Magnacca, the senior merchant who previously oversaw customer relations and much more at Walgreens, left to take over as chief executive of RadioShack. Magnacca’s job has remained vacant ever since, though Mark Wagner and Bryan Pugh have succeeded in filling the gap, if indeed one had existed.
Gourlay’s arrival in Chicago completes that transition. He is among the handful of Boots executives that have combined in recent years to elevate that company to levels of prosperity, innovation and creativity it had not previously achieved in its long history. He will certainly bring those same assets to Walgreens, while bringing some global thinking, initiatives and programs to a retailer that, while best in class in the United States, has been largely unexposed to globalization.
On to Tesco, a retailer until recently recognized as one of the best-performing, creatively oriented in the world, a grocery and general merchandise machine whose influence and success stretched from the United Kingdom across the globe to Eastern Europe and Asia.
That said, it cannot be denied that Tesco hit a bump when it entered the United States, in 2007, with the launch of a chain of convenience stores in California and other Western states. The Fresh & Easy enterprise never really gained a foothold, a victim both of inopportune timing and a failure to grasp the differences between U.K. retailing and the art as practiced in this country.
Tesco’s U.S. ordeal finally ended last month with the divestiture of its remaining Fresh & Easy stores. With that adventure at an end, the retailer that has emerged is in many ways stronger than the company that entered America six years ago. It remains the market leader in the United Kingdom, where it continues to outpace its nearest rivals, Asda, Walmart’s entry in the U.K. market, and Sainsbury, the grocer that preceded Tesco as U.K. market leader but has never really recovered since being dethroned.
Tesco, meanwhile, has worked to spruce up its brick-and-mortar and digital offerings and to utilize both for the benefit of the customer. To that end, it can be said accurately that no retailer anywhere approaches Tesco in its ability to simultaneously master these two retail formats.
Moreover, though the retailer’s global expansion has slowed, it remains the world leader if leadership is defined by the number of countries entered and conquered. In Eastern Europe, Tesco remains the leading retailer, having weathered an economic slowdown more effectively than its competitors. In Asia, the company remains a major player. Its business in Turkey is moving forward, though slowly.
Thus, in can be said, with accuracy, that a turbulent period in U.K. retailing is over. In its wake has emerged a retailing community characterized by two leaders whose consistently laudable performance remains the envy of the competition.