Tesco top boss Brasher quits
Brasher - in the top job for just a year - is replaced by group chief exec Philip Clarke. Can Clarke turn the business around?
"I have decided," said Clarke in a press statement, "to assume responsibility as the CEO of our UK business at this very important time. This greater focus will allow me to oversee the improvements that are so important for customers."
Big Sales Drop
Clarke didn't diss Brasher much (though it's thought the personal chemistry between the two wasn't great). He even said some of Brasher's changes over the last two months "are beginning to show progress". But it is plainly two months too late for Brasher's job. But is too late for British consumers, increasingly sceptical of Tesco 'offers'.
Like Tesco's Christmas turkey offer, which promised 'half-price' frozen birds at close to the same price other supermarkets were selling them for. In other words, Tesco - Britain's biggest private sector employer - has to start rebuilding trust with the consumer.
Trust deficitIt could start with its staff, rocked by news that many of its members will now work until they're 67 before they receive the full value of the pension originally promised, instead of 65.
Tesco's pension scheme is widely seen as generous, offering a career average arrangement. But in future, benefits will rise in line with the Consumer Price Index (CPI) inflation rather than the Retail Price Index (RPI). The difference is that the CPI index does not take into account housing costs like mortgage repayments and house prices, which tends to rise over time.
Confident competitionStill, Tesco is likely to spend a good part of £800m revamping its UK operations in the next two years. It is also investing heavily in non-food online and is still claiming it will create 20,000 new jobs.
But boss Clarke faces tougher competition than a year ago. Morrisons form is starting to look more serious, especially with its foray onto the high street with its new 'M' local stores. Lidl and Aldi continue to nibble away at Tesco's 'value' underside, while Sainsbury's and Asda are also looking more confident.
In other words, Tesco looks tired and ragged. Bring back Sir Terry Leahy?