Liverpool-bred Sir Terry Leahy, the former CEO credited with rejuvenating Tesco’s fortunes - taking them from a top-three UK retailer in profit terms to a top-three global entity - believes the UK’s fresh produce market requires little or no improvement, proclaiming it already delivers a top-quality product and service. And that’s despite a much talked about one per cent slump in profits for the multinational chain.
“There’s no urgent change needed really,” he begins. “I think fresh produce assumes a different personality to any other section in-store, both within Tesco itself and the market as a whole. It’s full of lines which, if you’ll excuse the pun, grow organically, are very susceptible to trends and fashions, and develop over time. And that’s the way it should be. It’s a great, flexible area to be in, and arguably one of the most exciting.
“Sure, there’s always a desire for improvement, and most of that is to do with quality rather than range. I think that’s the barometer the consumer judges against most. It’s a section that undoubtedly deals with the most traffic, and for that reason we’re only ever seeing that space getting bigger. And despite the demands for better quality, there are still more varietal differences, rather than the same product in five different packs.”
Despite the positives, Sir Terry does believe, in the context of Tesco at least, that the fresh produce aisle could benefit from more informative staff members - essentially people better educated on the varieties and stocks available, especially when it comes to exotic and organic products. After all, these are lines which have taken a particular hit in profits over the last quarter.
“I think there is more information out there now,” he adds. “Tesco and other supermarkets have looked at what independent producers do really well - in that respect, they communicate brilliantly. Our problem will always be that the produce aisles are really busy - people are not hanging around to have a chat about the strawberries. It’s heavy shopping going on. It’s a different world to a farmers’ market - that’s a good thing for us and a good thing for the farmers’ market too.”
Universal concerns continue to gain pace over the use of pesticides, and wastage over misshapen and discoloured produce. How does Tesco answer these ever-present issues?
“There are fewer pesticides used in production. That’s good. But at our level, there have to be some. The reality is you couldn’t feed the planet without using modern scientific methods. And nothing’s thrown away, that’s a myth. The reason the produce looks good is because we use good growers and varieties.”
In terms of the products themselves, and despite an elaboration of palates over recent years, classic produce will always come out on top in terms of popularity, says Sir Terry. “The traditional suspects do the most business - your apples, bananas, classic salads, potatoes, mushrooms. For organic produce, we’ve certainly seen those lines take the biggest slide. It’s what you expect in tough economic times, but it is a concern.”
Resigning from the board of Tesco in March 2011, Sir Terry has developed a follow-up career giving talks in managerial skills. That has led to the release of his first book, Management in 10 Words, a loosely auto-biographical account of his rise from shop floor to CEO, and the skills and lessons learned along the way - through both trial and error.
“Despite initially shying away from it, I was eventually convinced that people in management would be interested in my experiences at Tesco and how they can transfer those to their practices and organisations. That’s management in the sense of absolutely anyone who looks after staff - in-house, suppliers, contractors, anyone.
“The idea of Management in 10 Words was to crystallise the management lessons into single words. That seems like a simplistic method, but these words are relevant to a manager, an employer, an employee, everyone working as part of an organisation - and any organisation, not just retail. It was written with the intention that anyone can read it.
“Essentially the book is about how to work with people. Once you stop being by yourself and start working with others, how do you maximise that change?”
For Sir Terry, it was the introduction of Clubcard that drove both he and the chain on to unparalleled heights, a method for analysing consumer spending behaviour, pattern and trends. But it was his grounded approach and close relationship with the shop floor that was equally credited for the rise in Tesco’s fortunes. It was an approach that was second nature to him, after all, having been employed as a store shelf stacker in the 1970s.
“Even as CEO, I spent a week a year working as a shop floor staff member. It was imperative to running Tesco from the ground up. Doing something is very important to watching it being done, and you got a sense of how well the organisation was working from manning the checkouts, filling the shelves or working the nightshift.
“My reason for going to the stores wasn’t to inspect them, it was to meet the staff. And I will admit, my own experience on the shop floor helped in this relationship with the staff. I don’t think it would have been the same if I’d gone to Eton!”
Loyalty seems to be a highly regarded virtue for Sir Terry as his own allegiance remains with Tesco, even when it comes to personal shopping habits.
“There’s a great independent market out there which is to be celebrated, and I’m delighted the small producers and multinationals are working side by side, and sharing the rewards. We have to all work hard to maintain this parallel, because it’s good for the producers and good for the customers. But I couldn’t ever walk into another large retailer outside of Tesco for my grocery shopping; it wouldn’t feel right!” -
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