Leahy departed Tesco prematurely

Despite the well-earned plaudits following his departure last year there is an argument that Sir Terry Leahy, former chief executive of Tesco, was put under pressure to leave earlier than expected.

Sir Terry Leahy: Unfinished business.

The exit came at least two years earlier than originally planned as a result of the failure of a number of strands of his strategy, according to a City analyst who remains bearish on Tesco.

He suggests Leahy would not have chosen that time to leave because the US was still failing badly, the UK was also performing weakly, and some important aspects of the much-vaunted Retail Services division was in its formative stages.

Fresh & Easy: A big pressure point for Tesco.

The US Fresh & Easy business was originally heralded as the ‘second engine of growth’ at the time of its much-trumpeted launch but it was still underperforming badly when Leahy left – thereby leaving its fate in the hands of new CEO Philip Clarke.

And in the UK, Leahy left without having time to stablise this core part of the Tesco business – despite leveraging double and triple Clubcard points and pushing suppliers to be its chosen partner for launching new products.

The long-standing arrangement had been that Tesco chairman David Reid would leave the Tesco board first and following the appoinment of a replacement Leahy would then follow two years down the line.

Philip Clarke: Does he have the answers Leahy didn’t?

However, the issue of the failure of some core aspects of the Tesco strategy may have prompted some disagreements internally, as well as with major investors, which was sufficient for a re-assessment of the departures timetable.

Whatever ultimately happened behind those board room doors Clarke is still very much grappling with the headaches that Leahy faced and it does not look like he has yet found all the answers.


  1. Thomas on June 13, 2011 at 4:26 pm

    I think there has been an argument about their brand policy in the US. I believe their advertising is wrong for the US market.

    Fresh and easy logo looks more like a speicialist vegetable shopping experience rather than an all out supermarket experience which Tescos is and this is why I think it is failing.

    If they change it to a generic more modern logo, whilst keeping it to a simple name, then more Ameircans would shop there, though this is living up to the stereotype.

    At the moment it appears they are immitating Whole Foods which is a bad idea as Tescos does not hold up against what Whole Foods has. I think there was a boardroom clash over their American business target market.

    They need to be emphasising on Brazil; China and Malaysia more than USA. This is where the money is. USA is just too hard to crack. Why waste time when they have Wallmart? Makes more sense to build where there is no Wallmart.

  2. Glynn Davis on June 14, 2011 at 7:58 am

    Valid points. The reality is that wherever Fresh & Easy is located in the US then Wal-Mart will be there too. As seen by the recent news that it is to open its small Express format stores in the back gardens of F&E stores. Of all America, California is the choice.