intelligence

helped by having a number of stores that opened in the housing bust areas, which were then at fairly high rents, where you’ve seen depopulation, not population gr

h

growth,” he explains. “The leases were ta

CH C

CHANGING TIDES Le u

taken right before the crunch; some are a bit expensive.”

Leahy blames the losses on the big start- up investment. “In developing countries you could ease your way in – you did not have strong local competition,” he sa

says. “But in a developed market you ha

F xe

have to put in a lot of upfront capability.” Fi

Fixed costs such as owning the factories that

that make 30 per cent of Fresh & Easy’s prod produce mean that extra sales should qu c quiickly reverse its fortunes. “We can

IN INDIA WITH THE TATA GROUP, OPENING

STAR BAZAAR STORES

FRANCHISE AGREEMENT

287,669 IN THE UK

472,000 STAFF WORLDWIDE,

see our way through,” he insists. “That’s why we’re able to say losses have peaked. We are not going to become the number-one retailer in the US, but we can be a signifi cant business in the convenience stores market and that’s a very big niche in a place like the US.”

LEAHY’S LEGACY Leahy’s own background means he knows what ordinary shoppers want. He grew up in Liverpool in the 1960s when the Beatles had put the city on the international map. But he lived in social housing and his three brothers left school at 16. Leahy stayed on, went to university, joined Tesco at 23 and worked his way up from the shopfl oor to become chief executive in 1997. When he joined, Tesco piled its goods

high and sold them cheaply. Moving its range of products upmarket means its Finest range of quality foods is now the UK’s biggest brand, even beating Coca- Cola (and its Value low-price range is the second biggest). Leahy’s big contribution to the revamp

was introducing Clubcard, which gives shoppers loyalty points that make them return to accumulate more. For Tesco,

springboard: | page 44

BY THE COUNTRY

REVENUE (£M) UK

REPUBLIC OF IRELAND POLAND HUNGARY

CZECH REPUBLIC SLOVAKIA TURKEY US

SOUTH KOREA THAILAND CHINA

MALAYSIA JAPAN

38,558 2,282 1,942 1,698 1,287 891 595 349

4,162 2,344 844 633 449

................................................. ....................................... TOTAL

56,034 .................................................