“Job done,” said Tesco boss Dave Lewis as he unveiled a bravura set results.
Actually he said this: “After four years we have met or are about to meet the vast majority of our turnaround goals. I’m very confident that we will complete the journey in 2019/20.”
You get my drift, though.
We’ll tell you what’s true. You can form your own view.
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Hooray, said he City of London, and no wonder. The key numbers are nearly all heading in the right direction. Pre tax profits were up 28 per cent, the dividend almost doubled. Expectations were high in the run up, but Lewis beat them all the same.
It is worth noting that UK sales growth slipped in the second half of the year, and the overseas businesses continue to struggle. Quibbles? Yes but important ones.
Nonetheless, the state of the business when Lewis took over shouldn’t be forgotten. The grocer was reeling from the scandal of a £250m black hole in its accounts and looked clueless, not just in the face of the challenge posed by Aldi and Lidl but even that of Sainsbury’s for goodness sake. About the only innovation of note under Clarke’s regime was the Hudl, a now discontinued Tesco tablet.
With Lewis having cut his teeth at Unilever, a supplier rather than a retailer, questions were raised about whether he was the right man to turn the ship around. The doubters have fallen silent.
This is a retailer that knows what it’s about again. So do its customers. It’s delivering what they want, mostly, and looks better placed to cope with the Conservative government’s attempts to rip the country apart than some of its rivals even if Lewis’ cost cutting plans, and the closure of fresh food counters, aren’t to everyone’s taste.
He’s even having a go at discounting, moving his tanks on to the lawn of the German pair with the ‘Jack’s’ format. Lewis says the response to it has been good. But I doubt Aldi and Liddl’s bosses are overly worried. The nationalistic branding and 1950s chic suggest the format could handle a tweak.
Still, no one’s going to crucify diamond Dave for playing with ideas now he’s got the core business firing on all cylinders.
He’s earned that right and he’s earned the right to pat himself on the back and to receive one from the City.
Tesco has always employed some of Britain’s best retailers. They just needed pointing in the right direction, which Lewis has done. Nor is he standing still as Tesco moves into its next phase under his stewardship.
But the City and the financial media should be wary of lionising their crown prince.
That was what happened with another former Tesco boss, Sir Terry Leahy, the man who built the “supermarket that ate Britain”. The tail end of his tenure doesn’t look so good in retrospect. He wasn’t responsible from the misrule of Philip Clarke that Lewis has put right. But the seeds of it were sown under him.