Tesco has undoubtedly struggled in recent years but some of the criticism of the retailer’s previous management has gone too far.
Among many of the features emerging from the storm at Tesco is the way in which some people attempt to reinterpret, and on occasions distort, history.
There can be no doubt whatsoever that the achievements of the management teams at Tesco under the leadership of both Ian MacLaurin and Terry Leahy contributed to one of the greatest UK business success stories over the past few decades.
The creation of the different formats, own-label ranges both in food and non-food, Clubcard and online offer etc, took the business from being just one of the supermarket pack to the clear market leader in the UK.
Tesco expanded outside the UK to an extent that other supermarkets could only dream of. It was successful in delivering massive increases in shareholder value and the management teams rightly earned the plaudits.
Now the wheels have come off and the critics are having a field day pointing to mistakes that were made during this successful period.
I am not at all sure that all of this is either completely true or fair. Certainly today Tesco has too many large stores, but then so does virtually every other mature retailer in the UK. Nobody properly foresaw the effect of the internet, and we still don’t know how much more consumer spending will effectively switch from bricks to clicks.
The supermarkets have the added factor that consumers have changed their shopping habits and now want to shop more frequently in their local Tesco Metro, Little Waitrose or Sainsbury’s Local rather than doing one large purchase. However, consumers don’t buy more food as a result of their more frequent visits.
So is it now reasonable to pillory the team that created Tesco’s successful era because the world is different? Perhaps with all the success, arrogance did creep in; but is that a sufficient reason to rewrite the historical view and virtually accuse the people of doing the wrong things at the time? The pendulum has swung so severely from heroes to villains that it seems very unfair.
Let’s look at another situation where history gets rewritten or reinterpreted.
Changes in ownership can lead to a different view of the strategy for a business. If, for example, a company goes from being public to private, there is often a different viewpoint. That doesn’t mean that one is wrong and the other is right. However, new owners sometimes feel tempted to rubbish the efforts of the previous management team just for the sake of it.
Of course senior individuals also sometimes try to rewrite history for their own sake. The chief executive who wasn’t good enough at his job, got found out and was fired, approaches headhunters with the story: “There were differences of opinion over the strategy within the board, so I took the decision to leave.” The reality of the situation will probably lie somewhere between the two.
Businesses and the people who create or manage them are never all good, but rarely all bad.
- Peter Williams is chairman of Boohoo.com, Jaeger and Mister Spex