Tesco’s public flogging by the Groceries Code Adjudicator may have been scathing, but Dave Lewis will have lost little sleep over the report.
There is no avoiding the severity of the findings detailed by GCA Christine Tacon’s 60-page dossier, which uncovered some “shocking” practices.
Staff across all sectors of the business withheld payments, particularly at the end of ”key reporting periods” to help Tesco achieve margin targets and avoiding paying cash owed to suppliers was used as a way to meet targets.
Yet while the publication of such revelations from the GCA may have opened up old wounds, Tesco had long since stopped the worst of the reputational bleeding.
Lewis named rebuilding trust and transparency as one of the keys to his rebuilding job at the supermarket giant when he took the reins in September 2014.
After uncovering the £263m black hole in the grocer’s accounts, Lewis launched an internal investigation and a comprehensive review of how Tesco works with its 3,000 UK suppliers – resulting in the implementation of 14 new initiatives from introducing a supplier hotline to reducing the number of ways in which it calculates commercial income.
“While the publication of such revelations may have opened up old wounds, Tesco had long since stopped the worst of the reputational bleeding.”
Relationships with suppliers have improved markedly as a result – a fact the GCA openly acknowledges.
Yet the far from discreet slap on the wrists will still have served as a setback to Lewis, albeit a minor one.
Trust and transparency with suppliers is one thing, but Tesco remains in the midst of a brand rebuilding exercise among its customers, too.
More negative headlines containing Tesco’s name splashed across national newspapers – not to mention a less than flattering appraisal from business minister Anna Soubry on television news – will have done little to accelerate those efforts.
But will the Tesco hierarchy really be concerned by the damage this could do to its standing among consumers?
The grocer already seems to be slowly winning that reputational war, wooing back previously disillusioned customers during the Christmas period with its Brand Guarantee scheme, lower price points, deeper range and more shopfloor staff.
And the supermarket giant has rightfully pointed to the fact that bosses who oversaw and encouraged these practices have not set foot in the Tesco boardroom for a long time.
But it will also take heart from the previous struggles of retail rivals.
Aldi and discount rival Lidl are still proving chief tormentors of the big four, despite the former once selling a beef lasagne made entirely of horsemeat.
And Sports Direct’s January profit warning came as a result of an unseasonably warm winter, rather than off the back of any shopper revolt over the use of zero-hour contracts or warehouse working conditions, which simply hasn’t materialised despite the retailer’s much-maligned reputation.
Other businesses have all overcome much bigger hurdles than the one the GCA has put in Tesco’s way this week. But it faces a much bigger one with the findings from the Serious Fraud Office’s (SFO) separate investigation, which are set to be unveiled imminently.
Given the work he has already done, Lewis would be forgiven for looking upon the timing of the GCA’s report as nothing more than a minor distraction from his ongoing bid to turn the grocery supertanker around.
But what the GCA has unquestionably done is set the tone for the impending SFO report – and a few sleepless nights may now lie ahead for Lewis as he mulls over the words needed to defend the Tesco name once more.