It’s been a good few days for the supermarkets. On Wednesday Sainsbury’s revealed an 11 per cent increase in profits, and yesterday Wal-Mart hailed Asda as the star performer within its stable as it revealed first-quarter sales growth of 8.4 per cent.
The retailers have pursued very different tactics to navigate the recession, but their success derives from one common quality, which is a clear vision that comes right from the very top.
A big part of Tesco’s success in recent years has been a clarity of purpose and message throughout the business, which was clearly conveyed to customers. It’s something its rivals have struggled to emulate and Tesco took full advantage of their struggles.
Now the boot is on the other foot. While it remains a formidable machine, Tesco seems to have lost the magic touch that seemed to intuitively wire it into consumers during the golden years, which may in part be explained by the loss of marketing guru Tim Mason to the US business.
Retail genius he may be, but Sir Terry Leahy is not as visible as he was and is surrounded in large part by some pretty grey suits whose specialism is managing relationships down the supply chain rather than with customers.
At the same time, Asda and Sainsburys – and Morrisons too, for that matter – are being led with genuine flair. Andy Bond and Justin King are poles apart personality-wise, but both have given real clarity to the mission of their businesses, whether that be a laser-like focus on being the cheapest for Asda, or a rather more subtle combination of quality and price for Sainsbury’s. Unlike Leahy, neither has to worry about keeping an eye on vast international empires.
King and Bond have emerged over the past four years as the two outstanding retail leaders of their generation. Sainsbury’s appears to have, in chairman Philip Hampton’s words, nailed King’s feet to the floor. You can be sure Wal-Mart is doing something similar with Bond.