Business Strategic Management DURING his three-year tenure as Tesco’s boss, Philip Clarke cast himself as a visionary. He delivered weighty speeches urging retailers to “lead the revolution” or risk becoming “victims of evolution”. As head of Britain’s biggest retailer, and the world’s second largest by sales, he seemed to be doing just that. Tesco had built its business on sprawling supermarkets, but Mr. Clarke knew their time was passing and devised new uses for them. He ramped up sales online and through convenience stores, the channels of the
future. With a movie-streaming service, Blinkbox, and a tablet, Hudl, Mr. Clarke started to create an Amazon-like “ecosystem” that would bind shoppers to Tesco. Few retailers seemed to be more in tune with what he called the “informed, demanding, restless 21st-century consumer” Yet on July 21st the visionary suddenly lost his job.
The news coincided with Tesco’s second profit warning since 2012 and followed three consecutive quarters of declining same-store sales. In Britain, source of two- thirds of its revenue, Tesco’s market share has slipped (see chart). Apparently, he did not know 21st-century consumers as well as he thought he did. Tesco’s board picked a successor who will be expected to avoid that trap. Unlike Mr. Clarke, who started out stacking shelves as a teenager, Dave Lewis has never been a retailer. He built his career at Unilever, most recently in charge of personal-care products, and will be the first outsider to lead the 95-year- old grocer. Mr. Lewis sold a lot of Dove soap by telling women that they are more beautiful than they think. He will now try to cast Tesco in an equally flattering light.
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