Former Tesco boss Sir Terry Leahy has launched an extraordinary attack on his successor Philip Clarke claiming that he “actively attacked” the UK’s largest retailer while in the top job.
Sir Terry, who left Tesco in 2011, used a rare interview to pin the blame for the supermarket giant’s problems on Mr Clarke, whom he says “made a terrible, terrible error” by agreeing with Tesco’s critics and slating the company during his tenure. “He stood up and actively attacked his own business – the stores are too big, they’re overheating.
“I mean for the staff in the business who dedicated their life … to be told after all these years that this business was no good was absolutely flawed,” he told Retail Week. “They lost confidence. Once the leader of a business attacks his own business, there’s no way back.”
A Tesco lifer having started his career stacking shelves at his local store in Wirral during the Seventies, Mr Clarke replaced Sir Terry in 2011 but was ousted in 2014 after the retailer was plunged into crisis. His time in charge was marred by falling sales, profit warnings, the horsemeat scandal and the revelation of a £250m accounting black hole. Tesco reported a £6.4bn loss, the worst results in its history, a year after he left.
Sir Terry, who ran the company for 14 years, said that under Mr Clarke’s watch Tesco fell into the trap of agreeing with the retailer’s critics instead of trying to fix the key issues.
“Tesco had always had its critics because it did break down class barriers and there are some people in society who like class barriers,” he said.
“You were never going to persuade these people to like Tesco and, fatally, Phil and the new chairman [Sir Richard Broadbent] seemed to think, ‘if we agree with what these people have been saying about us, they’ll like us’.”
This is not the first time the former Tesco high flier has publicly criticised his replacement. In 2015 he told the BBC’s Panorama programme that the trust of millions of customers had been “eroded” due to a failure of leadership.
Mr Clarke hit back at his comments at the time by claiming that Tesco “faced a number of critical challenges” which had been building for years.
He was initially supportive of Mr Clarke, telling The Daily Telegraph a year after he handed over the baton that the new chief executive was “his own man – which is a very good thing” and “has to play it how he sees it”.