As she retires from a 15-year career at Tesco coinciding with phenomenal growth, executive director Lucy Neville-Rolfe tells Alex Lawson about her career with the top retailer.

Lucy Neville-Rolfe

Lucy Neville-Rolfe is a formidable character. A former government high-flyer, she has been a key part of the success of Tesco over the past 15 years. Yet while she is perhaps best known for taking on - and beating in many cases - the Competition Commission, she is also known for her unique, idiosyncratic style, with a coloured streak in her hair to boot.

Tesco has become almost unrecognisable from the business Neville-Rolfe joined in 1997

Tesco has become almost unrecognisable from the business Neville-Rolfe joined in 1997

Speaking exclusively to Retail Week as she steps down from Tesco, Neville-Rolfe explains how the grocer, which was due to update on Christmas trading after Retail Week went to press, has become almost unrecognisable from the business the farmer’s daughter joined in 1997.

The past 15 years have been characterised by rampant expansion in hypermarkets, convenience retailing and online in the UK, while internationally it is now the world’s third largest retailer, as well known in South Korea as Southampton.

The grocer had not long overtaken Sainsbury’s to become the UK’s largest food retailer when Neville-Rolfe joined and the scale of the business in Britain’s consciousness appealed to her. “When I was working in government I went on a leadership course. One of the people on it was [former Marks & Spencer director] Kim Winser. She made me realise that seeing the green bags, or in my case the Every Little Helps bags, going down the street would be a kick,” she recalls.

Tesco’s growth has not only been creating a global store network but building logistics, IT, human resources and store support divisions. Turnover was £13.89bn in 1997 and rose to £72bn in 2012. As the business grew, Neville-Rolfe’s responsibilities escalated.

“I started in external relations and then added the legal and pensions responsibilities. You can do more than you think - if you want something done, give it to a busy person,” she says. “I’ve gone from a team of 20 people to more than 500 worldwide. Those people are experts in their disciplines, full of talent. I will miss them.”

But with more responsibility comes pressured days and difficult decisions. The past year alone featured a profit warning, the departure of UK chief executive Richard Brasher and the initiation of a strategic review of US business Fresh & Easy.

Neville-Rolfe recalls pulling out of Japan, which the retailer exited last year, as a challenging moment. “The decisions like Japan are difficult, where you have colleagues you have been working with closely. There is a recognition that the company needs to move forward. You need to look strategically at how each business is contributing.”

Facing criticism

With Tesco’s relentless growth in the UK has come fierce criticism from those who believe its rise has been at the expense of both independent retailers and suppliers’ margins.

Anti-supermarket campaigners on sites such as Tescopoly called for a moratorium on takeovers of existing retailers either by Tesco or any of the other supermarkets and an independent watchdog with legal powers to protect the interest of the consumer, farmers and small retailers.

Neville-Rolfe says rapid growth over the past decade stoked consumer interest. “There was a big change in the early millennium when we bought T&S and Europa stores in London, many of which were converted to Tesco Expresses, and that led to more comment on our expansion than ever before,” she says. “When you have a spate of growth, people start to ask questions.”

Those questions led to three Competition Commission inquiries into practices in the industry and the battlefield of grocery retail. “I have a strong feeling that Tesco is a force for good in terms of offering healthy food at low prices. We had strong growth in the 1990s and we had inquiries into the industry as a result of that,” she says.

“It gave us the opportunity to nail some of the myths and people realised we had been a force to bring prices down. People can switch shops extremely easily in retail and that keeps you honest. You are only as good as last week’s offer to the customer. We moved forward very strongly and then suffered from investing less in the UK business. It demonstrates how competitive the industry is.”

The retailer has had to answer questions over its treatment of suppliers after protests from farmers and shoppers suggesting its low prices were fuelled by questionable practices.

Neville-Rolfe often had to front the response to these allegations.

In a column entitled ‘Tesco may not be perfect, but we strive to be ethical’ in The Guardian in 2007, she hit out at allegations of bad behaviour in the supply chain. “Things sometimes go wrong. But our detractors, including various pressure groups, should recognise that where they do, we accept that we have a duty to act, and we do act,” she wrote. “If they don’t recognise our shared duty in this regard, the conclusion must be that they are using Tesco as a means to gain easy publicity.”

From policy to product

Before Tesco, Neville-Rolfe worked in government and led the 1990 Food Safety Act

Before Tesco, Neville-Rolfe worked in government and led the 1990 Food Safety Act

Neville-Rolfe’s journey to become one of the most recognisable people in retail was unusual. Inspired both by her family farm and first woman Prime Minister Margaret Thatcher, she joined what is now the Department for Environment, Food and Rural Affairs (DEFRA).

She was later private secretary to the DEFRA minister and worked on negotiating the Common Agricultural Policy regime for sheep meat, milk quotas and deregulating the Milk Marketing Board. She cites being the leading official on the 1990 Food Safety Act as a key point in her career, and she became human resources director at DEFRA in 1990, taking on 150 staff and a budget of £11m.

Neville-Rolfe witnessed one of the darkest days in politics first hand on Black Wednesday in 1992. “The interest rate just kept going up. The PM went to lunch and when he came back the situation had got worse. It’s difficult for the Government if the currency has crashed, it’s an uphill struggle.”

After two years in the Cabinet Office the political winds changed in 1997 as Tony Blair swept to power. Neville-Rolfe decided to move into the private sector with Tesco. She believes both organisations bear comparisons.

“In both cases the organisations are of enormous scale. Where it’s different is that Tesco is good at starting a plan and implementing it quickly. In government, there’s more focus on brilliant policy ideas and debating change. I was good at writing policy papers. At Tesco it was much faster paced and the emphasis was on implementation and communicating orally,” she says.

At Tesco, she has spearheaded a personal mission - increasing the number of women in retail. “I got promoted in 2006 to the Tesco board. That was a great day for women. There are lots of talented women coming through and I have tried to support that in Tesco,” she says. “Men always think they are ready for a job a year before they generally are, while women think they are ready a year after they are. Technology has helped women in terms of balancing home and work.”

Neville-Rolfe, whose government background has given her a ministerial tone, cites social policies alongside business achievements as among her proudest moments at Tesco. These include 50 regeneration partnerships helping unemployed people in the UK and Europe, and the retailer’s work on climate change as well as the retailer’s extensive growth in Europe and Asia.

Change at the top

Terry Leahy also exited Tesco recently

Terry Leahy also exited Tesco recently

Neville-Rolfe’s departure signifies a changing of the guard that has included the exit of senior staffers such as David Potts, Tim Mason and, most significantly, Sir Terry Leahy departing in the past two years.

She says being involved in the fight against Tesco’s fiercest rivals alongside Leahy was exhilarating.

“When we were in Thailand the news came that Walmart was buying Asda. We got together in a huddle and in half an hour we worked out a public response. Within days we came up with a strategy to give them a run for their money - we turned it into a period of success,” she explains. That was a pivotal point for the retailer in terms of expansion, and one from which Tesco never looked back.

“Terry was a talented retailer. I would say the same of [Tesco chief executive] Phil Clarke. He brings a different perspective having worked in the international business, so is constantly taking ideas from one market into another.”

Philip Clarke took over as boss

Philip Clarke took over as boss

Neville-Rolfe is philosophical about the change. “Inevitably there is a different focus and people move on. New people and skills come through on top of a bedrock of continuity.”

Although she is leaving Tesco, she still has a suitably busy schedule awaiting her. As president of European retail industry body Eurocommerce she represents 6 million businesses of various sizes and is working on a voluntary code for suppliers across the EU. She is six months into a three-year term. She will also relish the opportunity to spend more time pursuing her interests in architecture, art, cricket, gardening and racing, as well as spending time with her four sons and granddaughter.

But don’t expect to just see her on the boundary ropes at The Oval. “I have got space for another big non-executive opportunity,” she says. “I would not rule out retail but I would not want to be in direct competition with a business I have left and loved.”

Neville-Rolfe might yet reappear in UK retail but, as one of the key figures in arguably the industry’s biggest growth story, she has already helped write retail’s history books.

Lucy Neville-Rolfe on…

Working with John Major

“He had a surprise election victory in 1992. I went to the No 10 policy unit that year and was there on Black Wednesday. I did a lot of work on developing policies on law and order, deregulation and sustainability. John
was a nice, engaging, positive person”

Meeting the Queen

Neville-Rolfe met the Queen when she was made a Dame in November 2012

Neville-Rolfe met the Queen when she was made a Dame in November 2012

“It was the absolute high point of my whole career. There are not huge numbers of Dames and most are actors and athletes. In 2012 I had a marvellous year”

Being an ITV board member

“It’s been a good couple of years for ITV and there are some parallels. We have a small international business we would like to get bigger. The disruptive effects of the internet have had as much of an impact in TV as it has in retail”