End of an era

This morning’s announcement that Sir Terry Leahy is stepping down from Tesco came completely out of the blue, and marks the end of an extraordinary career at a retailer he has truly transformed. It’s easy to forget that when he took over Tesco had only just overtaken Sainsbury’s as the UK’s biggest grocer.

Look at it today. It has double the market share of its biggest UK rival, it has a market cap four times the size of the next biggest UK retailer, it operates in 14 markets, has a huge non-food business and even has a banking arm.

But it’s not been expansion for expansion’s sake, and that’s why Leahy is such a remarkable leader. His relentless, unyielding focus on the customer is what’s made Tesco the machine it is, and even though it’s number one by miles, he’s kept it thinking with the hunger and drive of a number two. Even before he was chief executive, as marketing director he was the brains behind Clubcard, hugely ahead of its time and still the textbook study on how any consumer business can get to know its customers.

At every stage, whether developing non-food, going into convenience or segmenting its ranges with the launch of Finest, Leahy’s Tesco has been ahead of the curve in understanding how customer behaviour is going to change. He has made very few mistakes, although he will be disappointed to be leaving before the Fresh & Easy concept in the US has been proven.

What of the man himself? When i joined Retail Week in 2005 I wrote a letter to the chief executive of every major retailer introducing myself. The first response I got was a call from Leahy’s office, inviting me for lunch at Cheshunt a couple of weeks later, and it was with some trepidation I caught the train up to Hertfordshire.

I thought an interesting mark of the man was that it wasn’t a PA or a PR man who came to get me from reception, but Leahy himself, and he led me up to the very modest directors’ dining room in what is Tesco’s very modest HQ. But that’s Leahy - there are no airs and graces about the man, and he’s created a business very much in the same vein.

He has a reputation of being humourless and cold and while I wouldn’t claim to know him well and it’s true he has little time for the media, he is actually quite engaging on the subjects he’s passionate about, which as far as I can tell are Tesco, his home city of Liverpool, and Everton FC.

I interviewed his successor Phil Clarke at World Retail Congress last year and he’s built very much from the same mould - a Tesco lifer, and if anything even drier than Terry. Interestingly Tim Mason has been promoted to deputy CEO, and he’ll be expected to provide the marketing flair which Terry always gave the business, but with all the same names on the board, albeit in different jobs, I expect it will be business as usual.