The spirit of Jack Cohen still reigns supreme
As Tesco celebrates its 100th anniversary, boss Dave Lewis declares . . .
Dave Lewis is a little footsore. The Tesco boss has been taking part in a 30hour dance relay at Wembley stadium with staff and members of the public that broke the Guinness world record.
It was part of Tesco’s centenary celebrations, raising funds for Cancer Research UK, British Heart Foundation and Diabetes UK.
‘Obesity is a starter for all those diseases,’ he says. ‘So we are all into the idea of moving more. I won’t be signing up for Strictly, though. It’s definitely a case of dad dancing.’
Lewis is in a chipper mood, despite the difficulties facing the supermarkets in a hypercompetitive environment overshadowed by Brexit instability and the running sore of business rates.
He has put Tesco back in the black with profits of nearly £1.7bn last year, having saved the company from disaster.
He arrived in 2014 at one of the bleakest times in the hundred year annals.
Back then, the company was on its knees, having been hugely overstretched by former chief executive Sir Terry Leahy, then disastrously run by Lewis’s immediate predecessor Phil Clarke.
The business was torpedoed by an accounting scandal and £6.4bn of losses, the worst ever suffered by a British retailer.
Had Lewis failed in his rescue plan, Tesco might not have been popping the corks at its 100th anniversary this year – because there might not have been anything to celebrate.
The ‘disaster of 2014’, as Lewis calls it, happened because the company strayed from the credo of its founder, Jack Cohen, of always putting the customer first.
Cohen, who began selling groceries in 1919 with his £30 demob money from the First World War, was a huge personality whose entrepreneurial ghost still hovers over the aisles. Despite age and ill-health before he died in 1979 at the age of 81, he was visiting stores in his RollsRoyce until hours before his death.
a new chain of discount stores, Jack’s – launched last year to take on aldi and Lidl – is named in tribute to him.
The brand was born in 1924 when Cohen met Te Stockwell, a partner in a tea blending business. Cohen bought 500 chests and called it Tesco Tea, coining the name that was to change the face of shopping in Britain.
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the past 100 years, Tesco has survived numerous economic crises and a war. Where, then, does Brexit rank on the historic scale?
‘The thing about Brexit is it all depends on the detail. If there are tariffs, we will deal with it. The biggest single thing is if there is friction at the border,’ Lewis says.
‘The UK imports half of the food it eats. Perishable fresh food is the most vulnerable. If there is a hard border and suddenly there is a delay, supply could become difficult.
‘When we pick a lettuce, say in Spain, it has five days of life. Now, we can have it on a shelf within 24 hours so we can offer a customer four days of life. If that lettuce has to stand two days at the border, I’m not sure we can put it on a shelf, and that is not good for us.’
Lewis is also exercised about business rates and has proposed a 2pc levy on online retail sales to fund a 20pc reduction in rates bills.
‘You are now at a point in the cycle where some very big retailers are going bankrupt, which is why we have come out and said something must be done.
‘Our idea has gained traction with other retailers, it has been discussed at the Treasury Select Committee a few weeks ago. The debate needs to be had.’
Some long- standing observers will find a trace of irony in the threat of online retailers, as a couple of decades ago, Tesco itself was seen by its critics as the destructive force.
Detractors pointed to its ugly superstore buildings. Critics claimed it put smaller shops out of business and that it had recklessly over-expanded.
Under Phil Clarke, it became fixated on hitting profit targets. Managers were squeezing suppliers and ‘diving for the line’ – industry parlance for flattering the profits at the end of the financial year. The company, by its own admission, became too large, too self-interested and too difficult to trust. ust. Lewis says: ‘They started to lose sight of doing the right thing for customers. The other side of that is you start to lean heavily on your suppliers. Those two issues led to the disaster of 2014.’
So is that dark period now consigned to the past?
‘Yes, we have hit or are about to hit most of our targets this year. We have moved on.’
Lewis, 54, was born in a Yorkshire mining village and went to Trent Poly and Harvard Business School. He spent the first 27 years of his career at Unilever.
The trajectory of Tesco, as he points out, is a social history of the UK. as well as introducing self- service, it was a pioneer of Green Shield stamps.
It introduced out-of-town superstores, stores, began selling petrol, and was an early l adopter d t of fh home shopping, way back in 1984, through Teletext. In the 1990s, the chain moved upmarket as old distinctions between working and middle classes began to blur. It opened its Metro stores and launched its Finest range aimed at more affluent shoppers.
after all the changes since Jack Cohen wheeled his barrow to Well Street market in Hackney in 1919, does Lewis ever think about what food shopping will be like a hundred years from now?
‘In the next five or ten years I don’t see that much change. With technology and robotics, the things it can do are ahead of what customers want.
‘We could put a robot in the aisle which scans the gaps on the shelves – it would save a lot of time and money, but when you put a robot in a store, customers don’t like it.’
One little known activity Tesco undertakes is meteorology.
‘ We forecast weather in 14 regions in the UK,’ Lewis says. ‘We can forecast the weather by postcode and we use it to work out where to send extra produce. It has made us more efficient.’
The Tesco empire is being reshaped. ‘We have already repurposed around 3.5m sq ft of space we don’t need. It is still very valuable for other people, so we sublet.’
Some 9,000 roles have recently disappeared, though around half of those concerned have been redeployed. ‘We still employ more people now than when I started,’ he says.
Tesco took over wholesaler Booker last year for almost £4bn, but after the failed attempt by Sainsbury’s to merge with asda, Lewis doesn’t think there will be consolidation between the big four supermarkets.
He is looking to expand in Thailand, opening 750 convenience stores in the next three years.
Despite never having met Jack Cohen, Lewis sees himself as carrying the torch.
‘There are still some people in our business who worked for Jack,’ Lewis says. ‘everyone says he had this incredible knack of being very close to people. He had a thing about making the aspirational accessible. That is at the heart of Tesco today.
‘What I have learned from the life of Jack Cohen is that the customer always has the answer to any question we have as a business. It may not be easy, but they have the answer.’