May 17, 2020

Tesco Chairman Richard Broadbent Steps Down: Where Did the Brand Go Wrong?

Tesco
Finance
controversies
executives
Frazer Jones
3 min
Lightning Round: Consumers, Millennials, Bar Rescue and More
The situation has gone from bad to worse for Tesco Plc, and that situation was awfully bad to begin with. In September, it was revealed that the massive...

The situation has gone from bad to worse for Tesco Plc, and that situation was awfully bad to begin with. In September, it was revealed that the massive UK-based retail brand had overstated its half-year expected profits to the tune of £250 million, prompting incoming CEO Dave Lewis to launch a full investigation and suspend four high-ranking officials in the process.

By now eight executives have been suspended over the course of that investigation, and this Thursday came with the news that those accounting misstatements started well before this year’s half-year report, a bombshell that has led Tesco Chairman Richard Broadbent to officially step down.

According to Reuters UK, this has sent Tesco further into a tailspin leaving Lewis to pick up the pieces and confess to shareholders that things are going to be pretty rocky and up in the air for a while before they start to get better:

Shares in Tesco fell 8.5 percent to an 11-year low, meaning Tesco, once the juggernaut of the retail sector, has lost half its market value this year after the accounting errors compounded a succession of profit warnings. Chief Executive Dave Lewis, just seven weeks into the job, said he could no longer provide a full-year profit forecast for Britain's largest private employer because he did not know how much it would cost to rebuild the firm.

 

Broadbent told reporters that it was important to draw a line under what happened in the past, perhaps suggesting that by stepping down after three years as chairman he’s allowing shareholders to observe a line between the old management and the new and move forward more confidently. Meanwhile, Broadbent himself is bearing a lot of criticism for allowing Tesco to get to this low point.

And where exactly did Tesco go wrong anyway? According to Reuters, shareholders speculate that it started when the retail brand started putting a bigger emphasis on growth overseas rather than working on supporting business growth domestically. Those overseas efforts have not all been met with the same degree of success (hello, United States and Tesco’s Fresh & Easy misstep), and meanwhile changing consumer habits on the homefront are causing shoppers to drift toward different formats like Aldi or Waitrose. All of these issues have been building up toward falling profits and massive frustration from shareholders:

“Tesco doesn’t need to be the big sprawling business that it is,” another large shareholder told Reuters on condition of anonymity. "They should be in contraction mode. “(The accounting issue) is still pretty horrible ... and it’s not closed off yet.”

 

These issues were also no doubt catalysts toward the inclination for Tesco execs to cook the books in order to paint a more positive financial outlook picture. Now they are where they are – still in a freefall of finance and image, considering asset sales and spinoffs to raise the money needed to get back on its feet, and likely to face more troubles before new leadership is able to fully come together and set the brand back on a stronger and more legitimate path.

 

[SOURCE: Reuters UK]

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May 17, 2020

Jim Donald appointed the CEO of Albertsons

Jim Donald
Bob Miller
CEO
Albertsons
Sophie Chapman
2 min
Jim Donald to replace Bob Miller as CEO of Albertsons
The Idaho-based grocery chain, Albertsons, has appointed Jim Donald as its new Chief Executive Officer.

Donald, who previously worked as the company...

The Idaho-based grocery chain, Albertsons, has appointed Jim Donald as its new Chief Executive Officer.

Donald, who previously worked as the company’s President and Chief Operating Officer, will keep his presidential role.

The new CEO will replace Bob Miller, who will continue in his position as Chairman of the Board.

“Jim Donald has built an exceptional career in retail,” remarked Bob Miller.

“His knowledge of our company and industry is unmatched, and I know his contributions will be invaluable as we enter the next chapter of Albertsons Companies.”

“We look forward to tapping his experience in leading large consumer brands as we work every day to meet our customers’ needs, both in-store and online.”

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In his career, Donald has held positions such as the CEO of Starbucks and the CEO of Pathmark Stores.

The newly-appoint CEO also worked for Albertsons for 15 years, starting 1976, becoming the Vice President of Operations in Arizona.

“Albertsons Companies is uniquely positioned to operate in both a 'four walls' traditional environment and the 'no walls' world of technology,” stated Jim Donald.

“We serve 34 million customers each week across our 2,300-plus stores and serve 5.5 million patients in our 1,700-plus pharmacies.”

“That's a significant food, health and wellness footprint. We're well positioned to serve the evolving needs of today's customer, wherever and whenever they choose to shop with us.”

“I am looking forward to leading this dynamic company as we focus on innovation and customer-centric retailing in all its forms.”

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