By Jonathan Davies
Former Tesco chief executive Sir Terry Leahy has blamed his successor Philip Clarke for the supermarket's current crisis.
Speaking to BBC's Panorama, Sir Terry said: “People tried very hard to do the right thing; it clearly has not worked. In the end, that’s a failure of leadership, not a failure of the business, not a failure of the people who work hard every day in the business. When you’re the CEO, if it goes well, you get credit, if it doesn’t go well, you must take responsibility and Phil Clarke has taken that responsibility and paid the price with his job.”
Clarke was sacked last summer after a series of profit warnings. He was replaced by former Unilever boss Dave Lewis, who has since been dealing with the fallout from the profits scandal.
Shortly after starting work as Tesco's new chief executive, Dave Lewis said the UK's biggest retailer has overstated its profits by £263m. It is now the subject of a criminal investigation by the Serious Fraud Office (SFO).
Philip Clarke famously accused Leahy of running Tesco "too hot" - meaning the company shored up profits during the recession and starved stores of investment.
“The acid test is, are you attracting customers?” Leahy said on Panorama.
“Yes we were, more customers each year. Were sales growing? Yes they were. Tesco is the biggest, people expect it to have the best prices.
“I think that some of that trust has been eroded, which has meant that people have shopped around.”
Under Leahy, Tesco had stability in its senior executives. But Clarke's appointment brought with it a number of charges to its management.
“I think it lost too much talent,” Leahy told the BBC.
“It’s a big company, Tesco, and also very empowered — people were given responsibility and trusted to get on with their job, so there was a big team of experienced leaders. And too many of those were allowed to go in too short a period of time and so there was a shortage of experience, the kind of experience you need to carefully navigate a business like Tesco through this very turbulent and difficult period of this long, long recession, with these changes in structure of retailing taking place.”
In a statement to the BBC, Clarke said: “Although the company had enjoyed unprecedented success in the past, it was plainly the case when I took over Tesco in 2011 that it faced a number of critical challenges that had been building for some time. In bringing about business and cultural change within the company, inevitably some executives who were not considered to have a role to play in the future of the business were let go. There are many others who remain silent out of loyalty to the company and who would describe Tesco under my leadership very differently.”
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