Planet Retail commentary on Tesco’s new CEO

London -- Natalie Berg, global research director at Planet Retail, commented:

“As a branding expert, Lewis’ first task will be to define Tesco. Philip Clarke himself has admitted that the brand has baggage. It doesn’t stand for value, yet it doesn’t stand for quality, and without a clear proposition we fear that Tesco will continue to lose customers to more relevant and better-defined channels.

(See related story: Tesco CEO to be replaced by Unilever exec)

“Being the first ‘outsider’ CEO in Tesco history, Lewis will quickly need to prove that having no direct retail experience isn’t necessarily an impediment to taking on the biggest job in U.K. retail. The board will be relying on his significant FMCG experience to help steer Tesco safely through the increasingly-fractious price skirmishes currently unsettling the industry.

“Despite Clarke’s relatively short, bumpy stint at the top, we have to remember that when he inherited the business three years ago, the focus was very much on international operations – some of which have since rightly

“Although we feel Clarke has made significant progress on refreshing existing stores, the fundamental issue remains – shoppers are no longer making that big weekly trip to an out-of-town superstore. Unfortunately for Tesco, over half of its stores fall in the 50,000+-sq.-ft. bracket.*

“A change in leadership may bring some much-needed fresh thinking to Tesco, but the structural shifts in the grocery sector cannot be reversed. Lewis will need to reposition Tesco to adapt to this new normal.”

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