Former Tesco boss Leahy criticises 'failure of leadership' at the grocer

Leahy spoke about Tesco’s travails to the BBC’s Panorama programme, to be broadcast tonight.

He also said the grocer had allowed consumer trust to be “eroded” in recent years.

Leahy said Tesco’s loss of price leadership had undermined shopper trust. He said:  “Tesco is the biggest, people expect it to have the best prices and know they can trust Tesco to deliver that and not have to shop around and check that they’re getting the best deal.

“I think that some of that trust has been eroded, which has meant that people have shopped around.”

Leahy said of Clarke: “People tried very hard to do the right thing, it clearly has not worked.

“In the end that’s a failure of leadership, not a failure of the business, not a failure of the people who work hard every day in the business.

“When you’re the CEO, if it goes well, you get credit, if it doesn’t go well, you must take responsibility and Phil Clarke has taken that responsibility and paid the price with his job.”

He added: “I think the culture did change under Phil Clarke and not for the better.

“I think if you talked to people who knew Tesco, worked in Tesco when I was there, actually the culture was pretty positive and it has to be because it employs half a million people and you can’t make them do things, you have  to motivate them to do things, they’ve got to want to do it.”

Clarke defended his record. He said: “Although the company had enjoyed unprecedented success in the past, it was plainly the case when I took over Tesco in March 2011 that it faced a number of critical challenges which had been building for some time.

“It was recognised that this involved achieving cultural changes as well as business ones in order to move the business forward. During 2011 and 2012 we faced into these challenges, which required a thorough review of the business strategy and culture.

“Our objective was to create a company that could compete in the new era of retailing – the multichannel era.”

The programme also details how cosmetics giant L’Oreal threatened Tesco with legal action in a dispute over commercial income, and that former chief financial officer Laurie McIlwee had warned about Tesco’s financial controls in 2012.