Former Tesco Chairman MacLaurin takes swipe at Leahy's legacy

Tesco’s former chairman Lord MacLaurin used the stage of Tesco’s annual meeting to defend the record of current chief executive Philip Clarke and criticise the legacy left behind by former chief executive Sir Terry Leahy.

Leahy presided over a hugely successful 14 years for the firm as it increased sales, stores and market share from 1997 to 2011 and expanded globally. Sir Terry became chief executive when Lord MacLaurin was still chairman. He was chairman from 1985 to 1997.

The firm enjoyed growth of more than 10 per cent each year during Leahy’s time as chief executive.

He also led Tesco to start businesses in 11 different territories.

However, MacLaurin said that the move to expand overseas helped to cause the current problems and insisted that Mr Clarke requires three years to turn the fortunes of the supermarket around.

He said: “You have to judge a CEO not just by day-to-day performance, but by his legacy. It is sad to see the legacy of the former chief executive in the US. It has led to enormous writedowns.”

Lord MacLaurin said that the performance of a chief executive should also be judged on the legacy that was left for his successor.

He said: "And I think that we are all very sad in this hall to see the legacy that Terry Leahy left.

"It is a very sad situation - your enormous writedowns, and the situation in America.

"This job is going to be probably two or three years," he added.

Tesco was forced to axe its US business, ‘Fresh & Easy’ earlier this year after five years in which it had never made a profit and cost £1 billion in write-down costs.

Tesco was forced to issue its first profit warning for 20 years after poor Christmas trading in the run-up to Christmas 2011.

Last year, Tesco saw its annual profits fall to £120 million from £2.8 billion the year before as it began a huge investment programme to try and revitalise its stores and product range.

Mr Clarke said that Tesco will slow down on large new store openings and focus on smaller convenience stores, improving customer service and online retail.
Sir Terry Leahy was not available for comment.
Source: http://www.myfinances.co.uk/cut-your-bills/2013/06/29/former-tesco-chairman-maclaurin-takes-swipe-at-leahy-s-legac