New Tesco leadership, new marketing opportunity

Richard Brasher’s shock exit as CEO of Tesco in the UK and Group CEO Philip Clarke’s decision to be more involved in the running of the UK business suggest that he’s identified that something radical needs to happen to reverse its recent sluggish performance.

Rosie

He’s right. Tesco needs to develop a brand marketing driven strategy that will restore faith in the brand and business.

Clarke will now take direct leadership of the UK business alongside the rest of the global business only a year after the creation of the UK board and CEO role.

Analysts have more than hinted that behind the scenes there was “tension” between the two business leaders and Clarke’s cutting comment to Reuters that “a team can’t have two captains” indicates that it was this tension that has stalled Tesco’s progress in the UK.

Others have suggested that by focusing on margins and cost cutting Tesco has “lost touch with the consumer” which isn’t good for a business that has always talked about the customer being at the heart of its plans.

Clarke has already openly addressed the chain’s misjudgement in a number of areas and acknowledged the need for the supermarket to improve its service and quality, and the need to do it faster, if Tesco is to reverse its poor performance.

He is set to outline a full recovery plan for Tesco at the full year results in April, and the quick change in leadership signals that the plans could be radical.

Brasher has thrown his weight behind the frankly uninspiring Big Price Drop initiative that launched last year and has been criticised for focussing too much on price-cutting.

What Tesco needs to do is stop its monotone shouting about price cuts and develop a coherent and inspiring marketing driven strategy that improves the shopping experience and really engender warmth around the brand to restores its appeal.

With a new marketing director in place, after incumbent Carolyn Bradley was moved to a global role, Clarke should take the opportunity to be bold and brave with a strategy that really does focus on the customer and improving Tesco’s standing with shoppers. If consumers start to love the brand again, better performance will follow.

The shift in leadership at Tesco UK is good for business, its long-term performance and the way it presents its brand, but I would say there is more than a touch of scapegoating going on around Richard Brasher’s decision to leave Tesco after a disappointing year of performance.

Yes the year that he has presided over has included its worst Christmas trading in decades, sliding market share and more than a little doubt over the marketing strategy, but these are not a direct result of Brasher’s leadership – more a combination of bad luck with the economy and the legacy of Sir Terry Leahy’s long and successful reign.

But let’s not forget that Brasher has carved a successful career over 25 years at Tesco. Dissolving the UK CEO role completely implies that creating it in the first place was somewhat of a misstep by Clarke.

If Clarke can’t significantly turn the business around in the next 12 months, it will be his head that rolls in the end.

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