Showing posts with label changing of the guard. Show all posts
Showing posts with label changing of the guard. Show all posts

Monday, February 28, 2011

Changing of the Guard: Clarke Takes Over the Reins as Tesco CEO Wednesday


The Changing of the Guard at Tesco

A source at Tesco headquarters in Cheshunt, United Kingdom tells Fresh & Easy Buzz that incoming CEO Philip Clarke joined others today in wishing happy birthday to retiring CEO Terry Leahy, who celebrated his 55th birthday today, his last official day in the office as the leader of the world's third-largest food and grocery retailing chain and undisputed retail market leader in the UK, with nearly as much market share (about 31%) as its two leading rivals, Walmart-owned ASDA and Sainsbury's have combined.

Clarke, who's been Tesco's director of European and Asian retail operations as well as its director of information technology for a number of years, officially becomes CEO on Wednesday, March 2, which just happens to be the day Tesco's Fresh & Easy Neighborhood Market USA launches into Northern California, opening its first two stores, in San Jose and Danville. [See - February 14, 2011: First Look: Fresh & Easy Neighborhood Market Store in Northern California's Danville Set to Open on March 2; and January 17, 2011: First Look at the Willow Glen-San Jose Fresh & Easy Neighborhood Market Store Set to Open March 2, 2011.]

Sir Terry will be in the office tomorrow, we're told. But the day will mostly be ceremonial for the three-decade-plus Tesco veteran, who started as a stock clerk in a Tesco store while still in high school and has been CEO for the last 14-years.

Leahy might even leave the office a bit early tomorrow, as he prepares for what will be an active retirement as a private investor, part-time consultant to British Prime Minister David Cameron and head of an economic revitalization organization in the community where he lives. We suspect other ventures are in the works for the retiring CEO as well. After all, last week he trousered around $8 million by cashing in a couple million stock options. [See - February 28, 2011: Big Day For Tesco CEO Terry Leahy: Retirement and A Birthday But No Break-Even For Fresh & Easy USA On His Watch.]

Tesco and Leahy announced his retirement and Clarke's being named CEO on June 8 2010. And as part of the company's well-oiled succession process, Clarke has been working hand-in-glove with Sir Terry since then, trying on the CEO-shoes in order to get the best fit possible when he assumes the corner office at corporate headquarters on Wednesday. [See - June 8, 2010: Tesco CEO Terry Leahy Retiring; Philip Clarke New CEO; Tim Mason Named Deputy CEO But Will Remain Fresh & Easy Neighborhood Market Chief in U.S.

Among Clarke's metaphorical shoe-fittings was a recent trip to the U.S., which included nearly a week's worth of meetings and face-time with CEO Tim Mason at Tesco's Fresh & Easy Neighborhood Market headquarters in El Segundo, California, along with visits to Fresh & Easy stores in California, Nevada and Arizona. [See - February 23, 2011: Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market.]

A little bird told us one of the brief face-time activities Clarke had while visiting with Mason in February, who on March 2 also gets a new title - Tesco deputy CEO will be added to his current Fresh & Easy Neighborhood Market CEO title - along with a couple new corporate duties - overall responsibility for the company's branding and climate change initiatives - was some discussion about starting to use the Fresh & Easy chief's Twitter feed, which until recently was unused since being set up in 2009. [See - February 24, 2011: Dormant No More: Fresh & Easy Neighborhood Market CEO Tim Mason is Now Tweeting on Twitter.]

Mason, who will remain in Southern California and continue to spend the bulk of his time running Fresh & Easy, started tweeting on February 20, about five days after Clarke's departure, and has been posting those brief messages on his feed ever sense. (Since we published the piece linked above four days ago, the number of followers the CEO of Fresh & Easy has on his Twitter feed has more than doubled. Of course, correlation doesn't equal causality.)

Philp Clarke has no time to waste though. He must hit the ground running as Tesco's CEO on Wednesday, as he has many challenges facing him and very little CEO learning curve time available to him.

Among those challenges are: the struggling Fresh & Easy chain in the U.S. and Tesco's struggling operations in Japan, both which are losing money; maintaining the retailer's dominance in the UK amid stiff competition; and growing and improving the performance of Tesco's other global retail operations, particularly in China (but also elsewhere in Asia and in Europe), where as the head of Europe and Asia Clarke has put into place major growth plans. [See - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market.]

Regarding China, Tesco today announced some new growth plans in the nation with the fastest-growing economy in the world.

The UK-based retailer says it's signed an agreement to set up a joint-venture to develop shopping malls in the world's most populated nation, which is a follow-on to a strategy its been doing for some time now with its Lifespace Malls project.

According to Tesco corporate spokesperson Greg Sage, 50% of the joint-venture will be owned by a consortium of leading Asian investors including Singapore's Metro Holdings.

The total value of the project is in the region of £170m ($276.5220) with Tesco and the joint venture consortium each investing approximately £30m ($48.7980) of equity. Debt will be provided by banks including the Industrial and Commercial Bank of China and Standard Chartered Bank, Sage said today.

This joint venture will comprise three shopping malls in Shenyang, Xiamen and Fuzhou, each of which includes a Tesco hypermarket as an anchor tenant. The Lifespace shopping malls are part of Tesco's long term strategy to invest in building a substantial business in China, Sage said. Tesco currently operates four Lifespace malls and 93 Tesco hypermarkets in China.

At home in the UK, Tesco on Sunday (February 27) launched a counter-attack directed primarily at but far from exclusively on Walmart-owned ASDA, which along with Sainsbury's are its two main competitors.

A couple months ago ASDA started a program in which it says it will match the retail prices of all its competitors in the UK, including Tesco. Along with the price program's launch, ASDA lowered the everyday prices on numerous everyday items in its stores. The program has generated much attention and irritated outgoing CEO Leahy, who's said that despite the ASDA price promise Tesco still has better overall everyday prices than the Walmart-owned competitor does.

But actions speak louder than words, and yesterday, just two days before Sir Terry departs, Tesco launched what it's calling its "Price Check" program, which includes lowering the everyday price on over 1,000 items. Like ASDA's price check program, Tesco's features a website (here) where shoppers can compare prices from various retailers.

Meanwhile, on Wednesday, when the official CEO changing of the guard takes place at Tesco's UK headquarters, its Fresh & Easy Neighborhood Market USA chain will open the first two of what are its first batch of 11 stores in Northern California set to open in March and April.

You can bet even though Wednesday, March 2 will be his first official day as Tesco's CEO, and it will be a very busy first day at that, Philip Clarke will be taking a bit of time out of that very busy first day as CEO to check in on the two stores opening across the pond in the San Francisco Bay Area, which along with the rest of California is where Tesco is focusing nearly all of its new store growth this year.

It's also not lost on Clarke, or on observers like Fresh & Easy Buzz, that the first stores in Fresh & Easy Neighborhood Market's Northern California launch, which originally was planned to happen in early 2009 but was postponed because of what Tesco said was the bad economy but was equally due to Fresh & Easy's poor performance and bleeding of cash, are opening on March 2, the same day Clarke officially becomes CEO.

A fresh start for Tesco. A fresh start for Fresh & Easy. Perhaps that's what the symbolism of the March 2 timing could (or should) be viewed as?

Follow the Changing of the Guard at Tesco on Fresh & Easy Buzz

February 28, 2011: Big Day For Tesco CEO Terry Leahy: Retirement and A Birthday But No Break-Even For Fresh & Easy USA On His Watch

February 25, 2011: A Parting Gift: Retiring Tesco CEO Terry Leahy Exercises Options and Sells Nearly Three Million Shares of Company Stock

February 24, 2011: Dormant No More: Fresh & Easy Neighborhood Market CEO Tim Mason is Now Tweeting on Twitter

February 23, 2011: 'The Insider' - Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market

January 27, 2011: Incoming Tesco CEO Philip Clarke Names Expanded Corporate Executive Committee

October 8, 2010: 'The Insider' - Incoming Tesco CEO Philip Clarke Needs to 'Imagine' When it Comes to Fresh & Easy Neighborhood Market USA

October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market

October 4, 2010: Tuesday's Tesco Interim Report Offers A Road Map of Sorts For the Future of Fresh & Easy Neighborhood Market

September 13, 2010: 'The Insider' - Reading Philip Clarke's Tea Leaves: Might A Mixed Corporate/Franchise Model Be in Fresh & Easy Neighborhood Market's Future?

June 12, 2010: 'The Insider' - Will Phil Clarke Shake Things up at Fresh & Easy Neighborhood Market USA When He Becomes Tesco CEO in 2011?

June 8, 2010: Tesco CEO Terry Leahy Retiring; Philip Clarke New CEO; Tim Mason Named Deputy CEO But Will Remain Fresh & Easy Neighborhood Market Chief in U.S.
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Big Day For Tesco CEO Terry Leahy: Retirement and A Birthday But No Break-Even For Fresh & Easy USA On His Watch


The Changing of the Guard at Tesco
News/Analysis/Commentary

Most of the talk (and wins) at last night's Academy Awards gala in Hollywood, California was about the multi-Oscar Nominated movie "The King's Speech," which nabbed four wins out of 12 nominations, including for Best Picture. British actor Colin Firth also won the best actor Oscar for his portrayal of a proud yet stuttering King George VI in the hit film.

But later today across the pond at Tesco's corporate headquarters in Cheshunt, United Kingdom employees and friends will be celebrating another favorite British son of Irish ancestry, Terry Leahy (pictured at top), and likely asking the retiring CEO to make his own speech or two, as the staffers at the company he's lead for 14-years not only celebrate his retirement but also Sir Terry's 55th birthday, which is today.

There will no doubt be cake and beverages at the Tesco campus today, along with a few gifts for Sir Terry, as in addition to celebrating his birthday it will be his last official day in the office before he turns over his pinstriped grocery apron and corner office to director of international operations and information technology and incoming CEO Philip Clarke, who not only currently lives in the same neighborhood as Leahy but was also born and raised in the same city, Liverpool, as the man he's replacing, and started with Tesco over three decades ago as a store stock clerk, just like the retiring CEO did.

Not that Sir Terry needs any gifts. As we reported on Friday, Leahy gave himself a parting gift last week, trousering about £5,174,751.1 (pounds), or $8,357,223 million (U.S.) in stock options - perhaps as a small retirement nest egg or the start of his first private investment fund. The outgoing CEO has said one of the things he will do after he retires from Tesco will be private investment, including perhaps as an angel investor for small start-ups. [See- February 25, 2011: A Parting Gift: Retiring Tesco CEO Terry Leahy Exercises Options and Sells Nearly Three Million Shares of Company Stock

When it comes to the uncanny similarities between outgoing CEO Leahy and incoming CEO Clarke, some observers might say..."Meet the new boss, (almost) the same as the old boss." But despite their respective Liverpool origins and other similarities, Leahy and Clarke are different in many ways.

Clarke, however, must be the same as Sir Terry in the one way that ultimately counts: Ensuring Tesco remains the dominant retailer in the United Kingdom, along with becoming the second-largest global retailer, after Walmart, which has been Leahy's and thus the Tesco board's goal, in tandem with his fierce 14-year battle to make Tesco the UK's retailing top dog, which it is.

As he departs the company he's been with for over three decades, Sir Terry leaves Tesco with a market share (about 31%) that's nearly equal to that of its two leading competitors, Walmart-owned ASDA and Sainsbury's, which dominated Tesco in the sales of food and groceries in the UK when Leahy took the helm 14-year's ago.

Like him or not - and most people do like him - as the CEO of Tesco for the last 14-years Terry Leahy has been a combination overall solid strategic thinker (the corner office executive he became) and street fighter (the stock boy from Liverpool he started as).

For example, he recognized the importance of making Tesco a significant global retailer, particularly moving into emerging markets in Eastern Europe and Asia, long before most grocers, including all but a couple in the U.S., even thought about the concept. Today Tesco is one a just a handful of truly global food and grocery chains.

Back home in the UK it was under Leahy's leadership that Tesco basically launched a retailing version of carpet bombing (the street fighter) in terms of opening stores of various sizes in every city, town and village in the nation. Every municipality in the UK today has at least one Tesco-owned store. Most have many.

This strategy includes multiple formats, from superstores to the small Tesco Express convenience-oriented grocery markets, along with building the stores from-the-ground-up along with converting nearly every imaginable type of commercial building, including numerous pubs, into Tesco-owned stores. There's even a former church building in the UK that's today a Tesco Express store. Tesco kept the church facade in place and built around it.

Leahy has made mistakes, of course - who hasn't after 14-years as CEO of a major retail chain. But the successes out weight the mistakes overall, in our analysis.

But most of Sir Terry's mistakes, in our analysis and opinion, are more recent and have to do with Fresh & Easy Neighborhood Market USA, which is his baby, but now Philip Clarke's responsibility.

Sadly, one of Leahy's biggest mistakes vis-a-vis Fresh & Easy, in our analysis and opinion, is that he didn't make a number of significant changes that have been and are needed since the first stores opened in November 2007. We aren't going to detail those changes here. If you read through the three-plus years' worth of stories and posts in Fresh & Easy Buzz, you'll find numerous examples of which we speak.

But we also give Sir Terry credit for having the balls to launch a from-scratch food and grocery chain in America, focusing it on California, which not only is the biggest food and grocery retailing market (state) in the U.S. but also among the most competitive, along with being a very expensive place to launch a new chain.

Of course, one can reasonably argue that what we call "balls" is just another word for foolish. And there's plenty of room to argue that doing what Leahy and Tesco did with Fresh & Easy, and where they did it in the U.S. - California, Nevada and Arizona - is mostly folly.

But tomorrow is Sir Terry's birthday. So we wish the "happy warrior of retail" an enjoyable one, along with a fun and productive retirement.

Leahy leaves a fairly big executive grocery apron for Philip Clarke to fill. But he also leaves a big and expensive challenge, and a bit of a mess - Fresh & Easy Neighborhood Market USA - for the incoming CEO.

But If Clarke can look at Fresh & Easy with a fresh set of eyes, which it very much needed, make the needed changes, which include needed strategic as well as other changes, and get the fresh food and grocery chain to break-even by the end of Tesco's 2012-13 fiscal year, which is for all practical purposes the end of December 2012, then he will likely earn his Tesco wings.

Tesco says it expects in a few months to report a loss for Fresh & Easy in the same range as last year's loss, about $250-259 million for the current (2010/11) fiscal year, which ends tomorrow. Tesco reported a mid-year loss of $151 million for Fresh & Easy. There are currently 164 Fresh & Easy markets in California, Nevada and Arizona. [See - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market.]

But first Philip Clarke, who recently returned from a visit to America and Fresh & Easy Neighborhood Market [February 23, 2011: Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market] has to decide if he really wants to keep Sir Terry's creation, Fresh & Easy, operating, and losing millions of dollars each week, for another two years.

Clarke has said publicly he and Tesco deputy CEO and Fresh & Easy Neighborhood Market CEO Tim Mason are four square behind Fresh & Easy and plan to achieve the goal of break-even in two years. But we believe the jury of one (Clarke's mind/decision-making process) is still out on whether he will stay the course or pull the plug on Fresh & Easy USA before the end of Tesco's fiscal 2012/13.

Stay tuned.

The Changing of the Guard at Tesco: Related Stories










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Friday, February 25, 2011

A Parting Gift: Retiring Tesco CEO Terry Leahy Exercises Options and Sells Nearly Three Million Shares of Company Stock

Pictured above: Retiring Tesco CEO Terry Leahy (middle) listens to British Prime Minister David Cameron (left) as the two men, along with Peter Nears of Peel Holdings (right) tour the £4.5 billion Wirral Waters development on January 6, 2011 in Wirral, England. Wirral Waters, which is designed to develop and use the mostly unused dock space on the site, is the biggest regeneration development of its type in Britain. Click here to learn more about the project. Sir Terry Leahy is a member of the City Region Local Enterprise Partnership, which is involved in the Wirral Waters regeneration development. Cameron met with the board on January 6. [Photo credit: WPA Pool/Getty Images Europe.]

The Changing of the Guard at Tesco
News/Analysis/Commentary

Outgoing Tesco CEO and director Sir Terry Leahy will have a little walking around money to spend when he retires from the United Kingdom-based global retailer in March. Tesco, the third-largest retail company in the world, owns El Segundo California-based Fresh & Easy Neighborhood Market in the U.S., along with having stores in the UK, Europe and Asia.

On Wednesday (February 23, 2011), Leahy, 55, who's been CEO for 14-years and joined Tesco over three decades ago as a teenager, exercised stock options on 2.996.032 million shares of Tesco plc stock at various option prices, and sold the shares, resulting in a tidy profit for the man who's so closely associated with the UK-based retailer that he's often referred to in Britain as "Tesco Terry," according to a regulatory filing issued yesterday by the company. The options were acquired by Sir Terry under the company's Executive Share Option Scheme. [The regulatory filing is here.]

Based on our calculations, the exercising of the options and sales of the shares on Wednesday by Leahy, at the prices noted in the regulatory filing linked above, resulted in a pre-tax payday for the retiring CEO we estimate to be around £5,174,751.1 (pounds), or $8. 357. 223 million (U.S.).

Our estimate is based on the data provided in Tesco's regulatory filing news release issued yesterday. We arrived at the estimated figures by multiplying the number of shares by the difference in the selling price and the option price. We emphasis that ours is just that - an estimate.

When he retires as CEO next week, Sir Terry will be severing all his formal ties with Tesco. He isn't staying on as a non-executive member of Tesco's board, for example, nor is he remaining at Tesco in any advisory capacity.

Philip Clarke, who is Tesco's CEO-designate and its director of Europe and Asia operations and corporate information technology will assume the CEO position from Leahy as part of a formal succession process that's been going on at the company since June 2010.

When he and Tesco announced his March 2011 retirement plans last summer, on June 8, 2010, Leahy mentioned that one of his post-retirement plans was to become a private investor. Perhaps the exercising of the options on Wednesday and the sale of the resulting shares will comprise the first official fund Sir Terry creates and puts to work when he officially becomes "investor Leahy," when he retires next week? Leahy holds additional Tesco stock, which he's accumulated over many years.

Outgoing Tesco CEO has also been asked by British Prime Minister David Cameron to work on a number of economic and environmental issues in an advisory capacity for his administration, something Sir Terry has already started doing a bit of. Leahy supported and campaigned for Cameron over Gordon Brown in the 2010 election.

We suspect Leahy to get more involved in public service post-retirement, including further advising and helping the current British PM. But we doubt Leahy has any desire to be appointed to an official government position in the Cameron government, although we could be wrong.

After all, Sir Terry is only 55-years old. He's spent 14-years heading Britain's most well-known company - Tesco - which not only is the number one retailer of food, groceries and general merchandise in the UK, it also has a banking and finance division (Tesco Personal Finance and Tesco Bank), sells insurance, is a major mobile phone carrier and more. And as a result of being "Tesco Terry" all these years, he has among the highest recognition levels of any single person in the nation.

On top of that, he's become known in the UK and globally as a leader in the climate change reduction movement, along with being seriously involved in other environmental conservation issues.

If you add up all the factors noted above - the right age (55), high recognition level among the public, solid business and executive experience at home and globally, knowledge of economic and environmental issues, a proven jobs creator, generally well-liked as Tesco's CEO - some might suggest they're not bad credentials for getting into politics - perhaps getting elected as an MP, then using that position to become Prime Minister.

We don't think that's the post-retirement career path outgoing Tesco CEO Terry Leahy has in mind - but perhaps he should look into it.

After all - he doesn't need the money post-Tesco. And the UK government could sure use a political leader or two who actually has created a job or two. Or in the case of soon-to-no-longer be "Tesco Terry" but rather just plain old Sir Terry - one who's created tens of thousands of jobs at home during the 14-years he's been the CEO of Tesco, which today is the largest private sector employer in the UK.
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Thursday, February 24, 2011

Dormant No More: Fresh & Easy Neighborhood Market CEO Tim Mason is Now Tweeting on Twitter


The Changing of the Guard at Tesco
News/Analysis/Commentary

Breaking Buzz: Fresh & Easy Neighborhood Market CEO Tim Mason (pictured above in a Fresh & Easy store) is tweeting, as in posting those no-greater than 140-character messages on one of the world's most-popular and fastest-growing social media and messaging sites, Twitter.com.

Mason himself, or one of his staff members, set up a Twitter feed in 2009 for the CEO, which for over two years hasn't been graced with a single tweet by the head of Tesco's El Segundo, California-based Fresh & Easy Neighborhood Market fresh food and grocery chain, which as of today has 164 stores in California, Nevada and Arizona -- until now.

The CEO of Fresh & Easy Neighborhood Market posted his very first tweet on Sunday, February 20, apparently shortly after enjoying a ski trip to Vail, Colorado, where he spotted First Lady Michelle Obama on the slopes. Tim Mason's first tweet on February 20, 2011: "Inaugural tweetThe first lady looking good skiing in Vail. Very cool in grey,same brand of ski jacket as my wife, I managed to get a photo."

The First Lady indeed was on a trip to Vail during the extended President's Day holiday weekend, as was announced by the White House and has been reported on by numerous national media outlets.

Mason looks to have enjoyed posting his first tweet on February 20; so much so in fact he followed it up with four additional tweets on the same day.

Two of those additional February 20 tweets involve a bit of lobbying Mason was doing at the California State Capital in Sacramento, including a visit with Assembly Speaker John Pérez (D-Los Angeles), who prior to getting elected in 2008 to represent the people of Los Angeles' 46th District was the political director for the United Food & Commercial Workers (union) Local 324.

The United Food and Commercial Workers (UFCW) union, including local 324, has been trying to organize Fresh & Easy Neighborhood Market's store-level employees since the first batch of stores were opened in November 2007, as we've reported on and written extensively about here.

Pérez was elected Assembly Speaker in January 2010. His career in the organized labor movement spans 15-years.

Here's what (italics) the CEO of Fresh & Easy Neighborhood Market "tweeted" on February 20, about a visit he had on Friday, February 18, with Assembly Speaker Perez: "Friday in Sacramento,speaker Perez gave me a plastic duck. Grand office,large plastic duck collection."
Interestingly, a second (the fourth out of the five tweets) February 20 tweet had to do with First Lady Michelle Obama, once again on the ski slopes in Vail.

The fifth February 20 tweet is about starting the day off with coffee beans from Fresh & Easy.

Mason followed up his five tweets on February 20 with one on February 21, one on February 22, and one yesterday, February 23, for a total of eight so far. Mason's last tweet, from yesterday: "The talk of the Capitol last week.Gov. Brown has replaced the table in his office with a picnic table.I guess so he can say this ain't no..." (There is nothing more after the no... Perhaps it's coming today?)

There were no February 24 tweets at the time this piece was published. But if the current track record holds out...expect at least one later today.

If you want to read the tweets not included in this piece, you'll have to find Tim Mason's feed on Twitter.com.

Mason currently has 40 followers - and is currently following three of those 40 followers - the Fresh & Easy Neighborhood Market feed, Fresh & Easy director of marketing Simon Uwins, who hasn't tweeted since October 1, 2009 and - most importantly - his new boss, soon-to-be Tesco CEO Philip Clarke, who's been "tweeting" since November 2010.

We're willing to bet Fresh & Easy CEO Mason's Twitter feed follower-count goes up a bit past the current 40-followers after this post is published.

As our 'The Insider' columnist reported yesterday - February 23, 2011: Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market - the Fresh & Easy Neighborhood Market CEO's new boss, Philip Clarke, just recently spent 10 days or so, from February 6 -to- February 15, in the U.S., including at Fresh & Easy's Southern California headquarters with Tim Mason, who is adding the title of Tesco deputy CEO to his current one as CEO of Fresh & Easy.

Clark, who officially becomes Tesco's CEO in March but is already sharing duties with outgoing CEO Terry Leahy, comes to Tesco's corner office having held two senior executive positions at Tesco, which he joined in 1974 - head of Europe and Asia operations and chief of corporate information technology.

It's that latter position that makes Clarke a bit more keen on the Internet and particularly the use of social media that outgoing CEO Leahy was. And in November of last year, Clarke, who had been named Tesco's CEO-designate not long before that, started his Twitter feed, posting his first tweet on November 4, 2010.

As incoming CEO, Clarke is putting a greater emphasis on the use of social media, including Twitter, at Tesco, and among its executives, both those based at corporate headquarters in the United Kingdom and elsewhere around the globe.

Tesco UK has been using Twitter under Terry Leahy's charge. The retailer set up a food-oriented "Tesco Food" Twitter-feed last year, which its been using regularly.

In 2010 Tesco also started a couple special-interest Twitter feeds, including one focusing on clothing, which it sells in many of its stores in the UK, Europe and Asia. It's using the feed regularly at present.

Tesco has had a corporate Twitter feed, "Tesco Stores," since 2009. However, just two tweets, both posted on April 3 2009, have been made on the site despite the fact it has over 5,000 followers. We're told Philip Clarke plans to change that inactivity as part of his emphasis on the greater use of social media at Tesco.

Fresh & Easy Neighborhood Market launched its Fresh & Easy Twitter feed in mid-2008 and has been regularly active on it since then, using it well in a number of ways, in our analysis.

Fresh & Easy CEO Mason's first tweet, on February 20, 2011, came a mere five days after his new boss, Philip Clarke, departed Los Angeles on February 15 to return home to the United Kingdom, according to 'The Insider's column linked above and published yesterday.

If the timing between Clarke's arrival and departure at Fresh & Easy headquarters in El Segundo California - February 10 -through-February 15 - and Tim Mason's beginning to tweet on February 20, after having his Twitter feed sitting dormant for over two years, isn't simply a mere coincidence, which sources tell us it isn't, then it appears incoming Tesco CEO Philip Clarke is a pretty good motivator when it comes to social media adoption and use among his key executives.

Fresh & Easy Buzz, which is on Twitter @FreshNEasyBuzz, welcomes Tesco deputy CEO and Fresh & Easy Neighborhood Market CEO Tim Mason to Twitter.

And now that Fresh & Easy chief Mason is tweeting, we wonder if a new tweet will be forthcoming from Fresh & Easy Neighborhood Market director of marketing Simon Uwins, who's most recent update was in 2009.

After all, if Philip Clarke can motivate Mason to tweet for the very first time, Mason, who is Uwins' boss and prior to moving to the U.S. to head up Fresh & Easy in California was in charge of corporate marketing at Tesco in the United Kingdom, might want to follow Clarke's example, and have a Twitter-chat with Uwins, one marketing guy to another, letting him know that incoming Tesco CEO Philip Clarke doesn't like dormant Twitter feeds. Just a thought. After all, marketers should set the example when it comes to social media and social media marketing, shouldn't they?

Related Stories

We've written extensively in Fresh & Easy Buzz about the use of social media, including Twitter, in the food and grocery retailing industry, by Tesco's Fresh & Easy, other retailers, and in general. To read a selection of those stories, click on the following links: , , , , , .
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Wednesday, February 23, 2011

Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market


The Insider - Heard on the Street
The Changing of the Guard at Tesco

In October 2010, a few months after being named CEO-designate of Tesco on June 8, Philip Clarke (pictured at top), who officially takes over the corner office from Sir Terry Leahy at the global retailer's headquarters in Cheshunt, Hertfordshire, United Kingdom next week, said he planned to visit the U.S. and take a top-to-bottom look at Tesco's fledgling Fresh & Easy Neighborhood Market chain, which after opening two new stores in Southern California today now has 164 fresh food and grocery stores in California, Nevada and Arizona.

In a column on June 12, 2010, a few months before incoming Tesco CEO Clarke publicly mentioned his plans to visit Fresh & Easy's headquarters in El Segundo, California and a sampling of the stores in California, Nevada and Arizona, I suggested he do just that, asking in the column: Will Phil Clarke Shake Things up at Fresh & Easy Neighborhood Market USA When He Becomes Tesco CEO in 2011?

In another column, on October 2010 - Incoming Tesco CEO Philip Clarke Needs to 'Imagine' When it Comes to Fresh & Easy Neighborhood Market USA - I suggested not only how important such a visit, both for Philip Clarke's good as incoming CEO and that of Tesco and its Fresh & Easy chain's future (and for Tesco investors), but also offered a suggestion to Clarke about how he might approach the retailer's U.S. operations, as you will see if you read the column at the link above.

Following Clarke's signing off late last year on Fresh & Easy Neighborhood Market CEO Tim Mason's strategy designed to get Tesco's U.S. fresh food and grocery chain to break-even, there was much speculation in the press and among analysts, particularly in the UK, as to whether or not Clarke would make a trip to visit Fresh & Easy Neighborhood Market's operations and stores prior to becoming CEO in March. Clarke sparked some of this speculation himself when a couple UK publications he gave interviews to reported him saying he didn't need to visit Fresh & Easy in order to sign off on the strategy noted above.

But I, and Fresh & Easy Buzz, have said all along that Philip Clarke would be making such a trip to America before he takes over as Tesco's CEO.

And in my column today, while I can't report on the state of Mr. Clarke's "imagination" vis-a-vis Fresh & Easy USA (although I can report on a couple of his perceptions and emotions following the trip, which I will do at the end) - I can report that the Tesco CEO-designate has made a trip to the United States, including spending time at Fresh & Easy Neighborhood Market's corporate headquarters in El Segundo, along with visiting some Fresh & Easy stores in California, Nevada and Arizona, as well as a few stores operated by competitors.

Incoming Tesco CEO Clarke's just-completed trip to the U.S., which included an investor relations roadshow and visits with key Tesco investors in the U.S., began on February 6, when he landed in New York. He left the U.S. on February 15, arriving back home in the United Kingdom on February 16.

After spending a couple days in New York, Clarke and company hit Boston (on February 8); Omaha, Nebraska - home of major Tesco investor Warren Buffett - Denver, Colorado; and Sante Fe, New Mexico (all on February 9), where he and his team had a meeting with investors that afternoon. (Yes, there was some informal future Fresh & Easy market region scouting going on - but it wasn't the primary or even secondary reason for the visits to those cities, according to my sources.)

From New Mexico, Clarke and his team flew to San Francisco, arriving in the City-by-the-Bay on February 10. Tesco has two Fresh & Easy stores set to open soon in San Francisco, along with a third location waiting in the wings. And as Fresh & Easy Buzz has reported, the retailer is searching for additional locations in the city. [See - February 1, 2011: Tesco's Fresh & Easy Neighborhood Market Still Plans April-May 2011 Openings For First Two San Francisco Stores; and January 26, 2011: Fresh & Easy Neighborhood Market is On A Mission - In San Francisco's Mission District.]

After San Francisco, Clarke flew to Southern California, using it as his base from February 10 -to- 15 to visit Fresh & Easy stores in the region and in Nevada and Arizona, along with spending time at Fresh & Easy's corporate headquarters in El Segundo, where he met with Tesco director and Fresh & Easy Neighborhood Market CEO Tim Mason, who will get the added title of Tesco deputy CEO on March 1, and various executives and headquarters employees.

Philip Clarke also visited Fresh & Easy's distribution center and fresh foods production kitchen in Riverside Country, California on Valentine's Day (February 14), where among other activities he taste-tested a number of fresh-prepared meals and side-dishes sold in the Fresh & Easy markets. Word is the Chicken Fontina and Broccoli and Cranberry salad were his favorites.

Visits to some Fresh & Easy stores, and those of a few of its competitors in Southern California, metro Las Vegas, Nevada and metro Phoenix, Arizona, were high on Clarke's itinerary sheet during his visit, as I noted earlier.

Below are the highlights of some of incoming Tesco CEO Clarke's store visits during his time in the Western USA:

>Metro Phoenix, Arizona: On February 11, Clarke visited at least three Fresh & Easy markets in metro Phoenix, along with a Kroger Co.-owned Fry's supermarket and a store operated by locally-based grocery chain Bashas'.

>Metro Las Vegas, Nevada: The following day, February 12, Clarke visited a number of Fresh & Easy stores in metropolitan Las Vegas, Nevada, including the unit at Durango and El Capitan, where he admired the display of $10 per-dozen roses, which Fresh & Easy Neighborhood Market was advertising in its Valentine's day ad circular and promoting in-store for the holiday week. While in Las Vegas, Clarke also visited a few competitor's stores, according to sources.

>Southern California: Back in Southern California, the incoming Tesco CEO toured a number of Fresh & Easy Neighborhood Market stores in the region, where as of today Tesco operates 101 of its 162 small-format fresh food and grocery stores.

Among the Fresh & Easy stores Clarke visited in Southern California were the Manhattan Beach unit, which is the closest Fresh & Easy store to corporate headquarters in El Segundo - and the one Fresh & Easy CEO Tim Mason likes to take guests to visit. The store, which is one of the better-performing Fresh & Easy markets, also recently acquired a new produce department, along with a new floor. Word is Clarke likes the Manhattan Beach store, which is located just a head-of-lettuce-throw-away from a Trader Joe's market. [Take a look at the store, and the nearby Trader Joe's, here.]

Additionally, the soon-to-be-CEO visited a Fresh & Easy store in Burbank, which has an in-store coffee shop/bakery, something the grocer is testing. Interestingly, its also something Fresh & Easy Buzz first suggested nearly three years ago, and has mentioned since, that Fresh & Easy Neighborhood Market should include in some of its stores. The Burbank store (at Olive and Verdugo) opened on April 7, 2010. It was the 150th Fresh & Easy market opened by the chain. Since the Burbank store opened in April 2010, the grocer has opened 12 additional stores, nine of which have been opened so far this year.

Clarke also toured a Whole Foods Market store in Southern California while in the region; a visit he's reported to have proclaimed to be "quite fun," according to an excellent source.

Word is, not only was this the first time incoming Tesco CEO Philip Clarke has visited any of the Fresh & Easy stores, its also the first time the United Kingdom native, born and raised in Liverpool, England just like outgoing Tesco CEO Terry Leahy was, has visited grocery stores at all in the Western United States. Clarke has been with Tesco since 1974.

That Clarke hasn't visited the Fresh & Easy stores prior to his recently-concluded trip isn't all that unusual though. In his current positions as chief of Tesco's European and Asia retail operations and head of corporate IT, the soon-to-be-CEO wasn't directly involved in the planning, launching and operations of Fresh & Easy in the U.S. Instead, the U.S. chain, which was the idea of outgoing CEO Leahy, has been the focus of Tesco director and Fresh & Easy Neighborhood Market CEO Tim Mason, who as his CEO title reflects, has had charge of the launch and operations, reporting directly to Leahy.

Mason will be officially adding the title Tesco deputy CEO to his resume, along with retaining the Fresh & Easy CEO title, on March 11. However, he will report to incoming CEO Philip Clarke, who will have full responsibility for running Tesco's growing global retailing empire.

Tim Mason will add a couple new corporate duties to his management shopping cart though, taking responsibility for Tesco's branding and its climate change initiatives. Prior to coming to the U.S. to start up Fresh & Easy Neighborhood Market in 2006, Mason was Tesco's corporate marketing chief, as well as a member of the company's board, a position he retains.

The sixty-four-thousand-dollar question - actually the $1.5 billion question, since that's about what Tesco has invested in Fresh & Easy so far - about Philip Clarke's 10-day visit to the U.S. and his five days at Fresh & Easy Neighborhood Market's headquarters and in the stores is: What did he learn? And the logical follow on to the question is: Did what Philip Clarke learn make him feel more positive or less positive about Fresh & Easy's chances of breaking even by the end of Tesco's 2012/13 fiscal year? The 2012/13 fiscal year-end is a little over two years from now. Clark is one the record as saying Fresh & Easy will break-even by then.

It's really a rhetorical question though, as Philip Clarke is the only person who knows the actual answer to those two questions. And his answer, if asked such a set of questions, is rather predictable to me, as it should be - positive and affirmative.

But before he left Los Angeles to fly back to London on February 15, soon-to-be Tesco CEO Philip Clarke attended a "City Meeting" at Fresh & Easy Neighborhood Market's headquarters in El Segundo, California, not far from that Manhattan Beach store he visited and liked.

City Meetings, in Fresh & Easy-speak, are regular events in which the grocer brings in store management and others emplyees from various regions for an event/meeting in which all sorts of things are discussed, such as region and store performance, new company initiatives, new product introductions and the like. The meetings are colorful events. Fresh & Easy employees often dress up in outfits, tied to a particular theme, food is served, and various group activities and exercises are conducted. The meetings are designed to be informative - but also to be motivational and team building exercises.

As I mentioned in the beginning of my column, I can't personally speak to Philip Clarke's "imagination" vis-a-vis his trip to America and outlook about Fresh & Easy post-visit - nor can I speak to the two questions posed above except in the ways I have. All I can do is report what the soon-to-be Tesco CEO said before he departed for London from Los Angeles on February 15, 2011 after that City Meeting, which is: "Leaving LA for London after attending the city meeting at El Segundo - great trip, good insights and lots of ideas. Invigorating."

Tesco's current fiscal year ends on February 28, 2011. The retailer has said it expects to report a loss for its Fresh & Easy USA chain for the full fiscal year in the $250 -to- $259 million range, about the same loss as it reported in the prior fiscal year, despite adding considerable sales over the past fiscal year. In October Tesco reported a half-year loss for Fresh & Easy Neighborhood Market of $151 million. [See - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market.]

But now the hard work begins for Clarke, who's most-challenging inheritance from outgoing CEO Terry Leahy is Fresh & Easy USA. Clarke must take the good insights, wealth of ideas and invigoration he picked up during his visit to America and Tesco's U.S. outpost and use his imagination and other skills to turn them into a plan, along with Tim Mason and his team at Fresh & Easy, that results in break-even for the fledgling Fresh & Easy chain by the end of Tesco's 2012/13 fiscal year, which is something Clarke no doubt assured the Tesco investors he spent time with on the first leg of his U.S. trip is going to happen - and happen on time. And that's a "fresh" task for Clarke and team that isn't going to be "easy" to achieve.

Stay tuned.

- The Insider

Related Stories

January 27, 2011: Incoming Tesco CEO Philip Clarke Names Expanded Corporate Executive Committee

October 8, 2010: 'The Insider' - Incoming Tesco CEO Philip Clarke Needs to 'Imagine' When it Comes to Fresh & Easy Neighborhood Market USA

October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market

October 4, 2010: Tuesday's Tesco Interim Report Offers A Road Map of Sorts For the Future of Fresh & Easy Neighborhood Market

September 13, 2010: 'The Insider' - Reading Philip Clarke's Tea Leaves: Might A Mixed Corporate/Franchise Model Be in Fresh & Easy Neighborhood Market's Future?

June 12, 2010: 'The Insider' - Will Phil Clarke Shake Things up at Fresh & Easy Neighborhood Market USA When He Becomes Tesco CEO in 2011?

June 8, 2010: Tesco CEO Terry Leahy Retiring; Philip Clarke New CEO; Tim Mason Named Deputy CEO But Will Remain Fresh & Easy Neighborhood Market Chief in U.S.

Read (click on the green link) past columns from 'The Insider' columnist at this link - .
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Thursday, January 27, 2011

Incoming Tesco CEO Philip Clarke Names Expanded Corporate Executive Committee

The changing of the guard at Tesco plc

Incoming CEO Philip Clarke has named - and enlarged - the members of his executive committee, which will assist him and United Kingdom-headquartered Tesco's board in making policy when he takes over for retiring Terry Leahy on March 1 of this year.

Tesco is the parnet company of El Segundo, California-based Fresh & Easy Neighborhood Market, which currently has 156 fresh food and grocery stores in California, Nevada and Arizona.

In addition to the current seven members of the executive committee under CEO Leahy, who are all members of Tesco's board, Clarke has named seven new members, all Tesco executives, to the committee, which functions to run the company just below the Tesco plc board level.

Below are the new members of the executive committee, named today by incoming Tesco CEO and current director of European operations and corporate information technology Clarke:

  • Gordon Fryett, Tesco's new head of corporate property strategy;
  • Alison Horner, the recently appointed corporate group personnel director;
  • Trevor Masters, head of operations in the Czech Republic, Hungary, Poland, Slovakia and Turkey;
  • Mike McNamara, who was appointed today as chief information officer, with responsibility for both IT strategy and operations across the group;
  • Bob Robbins, recently appointed chief operating officer of Tesco's United Kingdom (UK) business, which represents about 70% of total corporate revenue;
  • Ken Towle, the recently appointed corporate/group Internet retailing director;
  • Laura Wade-Gery, Tesco's new commercial director (corporate buying and merchandising) for UK clothing, electronics and general merchandise.
Gordon Fryett, Alison Horner, Trevor Masters and Mike McNamara will report directly to Philip Clarke, according to a corporate spokesperson. Bob Robbins and Laura Wade-Gery, whose responsibilities are in the UK, will report to Richard Brasher; and Ken Towle, who will operate within the services area, will report to Andrew Higginson, Tesco said today.

Additionally, the spokesman says Tesco will shortly be appointing a group commercial director, who is also expected to join the executive committee.

The seven new members (plus the eighth to be named later) join the seven Tesco board members listed below to comprise Philip Clarke's executive committee:

  • Philip Clarke (board chairman) – Tesco group CEO
  • Tim Mason – Tesco deputy group CEO, CEO Fresh & Easy USA
  • Richard Brasher – CEO United Kingdom
  • Andrew Higginson – CEO Tesco group services
  • Laurie McIlwee – Tesco group chief financial officer.
  • Lucy Neville-Rolfe – Tesco group corporate & legal affairs director
  • David Potts – CEO Asia
Tim Mason, who's currently the CEO Tesco's El Segundo, California-based Fresh & Easy Neighborhood Market and a member of Tesco's board, gets the added title of Tesco deputy CEO, as noted above, on March 1, when Philip Clarke replaces Terry Leahy as CEO at global headquarters in Cheshunt, UK.

Mason will remain in Southern California at Fresh & Easy's headquarters. Running the 156-store fresh food and grocery chain will remain his main job function. However he will take on some added Tesco corporate responsibilities, to include marketing and branding, along with the company's global climate change initiatives, which have been the pet project of CEO Leahy over the last few years.

"I am delighted that I have been able to bring together such a strong team which possesses the right blend of talent and experience needed to drive the company forward and take it to a new level," Incoming CEO Clarke said today, announcing his expanded executive committee. "This is a formidable group of people with an enviable range of talents gleaned over many years in Tesco and other organisations, both in the UK and overseas."

Meanwhile, retiring CEO Sir Terry Leahy is attending the World Economic Summit in Davos, Switzerland, where he's participating in a panel discussion, along with other global business and government leaders, focusing on climate change and carbon reduction issues and strategies.

As noted above - the climate change issue is one that's very important to Leahy, both as CEO of Tesco, which is nearly at the end of its 14-year run, and personally. Expect him to continue working on it at some level after his retirement from Tesco on the last day of February 2011.
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