Tesco's trouble and what it means for the rest of us

The news that Richard Brasher, the CEO of Tesco has ‘stepped down’ may not come as much of a surprise; considering that the biggest supermarket in the UK has recently suffered a drop in market share - following profit warnings and disappointing sales prior to Christmas. In addition the controversial “price drop” campaign which Brasher spear headed has failed miserably. Tesco’s struggle is representative of the UK’s economy and shows there is still a long way to go before the economy returns to a more stable level.

Brasher stepped down on the 15th March after only a year in the job the actual reasons have not been announced and it is most likely will not be published; it is a well known fact that there has been a clash of egos in the boardroom. Brasher and the Group CEO, Philip Clarke did not get on well and Tesco’s latest campaign failure in an attempt to increase revenue may have contributed to Brasher’s resignation.

The last few months have also been turbulent for the group given Tesco’s handling of a government scheme for employing young people in work placements. The stores have also seen decreasing in popularity with the desertion of regular customers turning to cheaper supermarkets such as Morrison’s for their weekly shop. The recent developments pose questions about the strategy of UK’s biggest retailer.

According to reports Tesco has been underperforming, and the supermarket giant has hit hard times raising concerns for other businesses throughout the UK. It highlights that we still need to be concerned about the continuing recession and how smaller businesses are faring in this climate. The CEO of fashion chain French Connection Stephen Marks has said that ‘the economic situation hampered trading’ and that ‘clearly the state of the UK economy is not helping the position’ this is following French Connections fall in sales, with an 8.2 million loss in their UK stores.
With significant events happening in the UK this summer the hopes are that things will improve

The next step for Tesco is a plan to revamp their stores, spending millions on this and focussing on product detail and their online business instead of building more giant supermarkets.
Let us know how the continuing recession has affected you.