The Wall Street Journal reports this morning that as Tesco prepares to announce its annual sales and profit numbers later this week, the pressure is "piling up" on the company's CEO, Philip Clarke to turn around the world's third-ranked retailer.
The story says that "the British supermarket chain's market share and stock price are languishing at near-decade lows," and that it is battling on a variety of fronts to prevent any further erosion of its UK market share. On the one hand, discount chains such as Aldi and Lidl are growing sales at the expense of the traditional supermarket sector, forcing all the players to engage in a price war that is putting enormous pressure not just on Tesco, but also on the likes of Walmart's Asda Group.
"But competition and changing trends have hit Tesco the hardest," the Journal writes.
Clarke has responded to the situation by scaling back on international investments, such as in the US and Japan, and investing in "store revamps, recruitment drives and attempts to entice customers with upmarket coffee shops, bakeries and family-friendly restaurants. But those moves haven't reversed falling sales."
The story says that "the British supermarket chain's market share and stock price are languishing at near-decade lows," and that it is battling on a variety of fronts to prevent any further erosion of its UK market share. On the one hand, discount chains such as Aldi and Lidl are growing sales at the expense of the traditional supermarket sector, forcing all the players to engage in a price war that is putting enormous pressure not just on Tesco, but also on the likes of Walmart's Asda Group.
"But competition and changing trends have hit Tesco the hardest," the Journal writes.
Clarke has responded to the situation by scaling back on international investments, such as in the US and Japan, and investing in "store revamps, recruitment drives and attempts to entice customers with upmarket coffee shops, bakeries and family-friendly restaurants. But those moves haven't reversed falling sales."
- KC's View:
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I would not want to be Philip Clarke this week … he would appear to be in for what the late, great Bob Murphy used to call "nine miles of bad road."
At some level, it almost appears that Tesco's biggest problem is the lack of a cohesive and well-communicated strategy. There's a slight sense of desperation that seems at odds with the well-oiled machine that was created by Ian Lord MacLaurin, and continued by Sir Terry Leahy (though it ends up that the latter was building an enterprise that was not as sustainable as many believed).
It isn't all Clarke's fault. The competitive landscape has changed, and he's so busy playing defense that it is hard to make any offensive headway. But that doesn't make him any less responsible.
