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from Breakingviews:

Tesco’s ambitions earthed by UK retail reality

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

When Philip Clarke took over from the Sir Terry Leahy as Tesco’s chief executive in March 2011, he seemed to have one of the sweetest corporate inheritances around. The company was strong in its British home market and growing well elsewhere, although the U.S. expansion remained a work in progress.

But the Clarke era has seen five consecutive quarters of declining like-for-like UK revenues at the once-almost-almighty retailer. The latest announcement, of a 2.3 percent decline (excluding petrol) over the Christmas 2011 trading period, was a shock. It caused a 13 percent drop in the share price on Thursday.

It’s tempting to think that Leahy left Tesco in less good shape than it appeared from the outside, or that Clarke has mucked things up. Is the company’s strategy – low costs and a steady expansion of formats, product lines and total retailing space – flawed? Was Leahy more charismatic and less efficient than it appeared? Does Clarke lack the inspirational touch?

BA horror show should quell talk of “green shoots”


Willie Walsh likes to tell it as it is.

Recent weeks have seen smatterings of good economic news. Sectors that took the full weight of the recession last year said they were staggering to their feet now spring is here.

Retail: John Lewis had its best week of the year so far from 2nd-9th May.

Leisure: Pubs group Greene King said things have ‘generally improved’ since the start of the year.

R-word looms as retail sales slump


Exactly one year since the credit crunch started retail sales have shown their biggest fall on record in Britain, news that is likely to spur recession talk among consumers, who are already feeling the pinch from rising fuel and food costs.

For sure, the 3.9 percent drop in June was much worse than expected – economists had forecast a 2.5 percent decline – but shop prices are still higher than a year ago and the retail sales data series is notoriously volatile.retail-salessmaller.jpg