The chairman of Tesco has stuck his head above the parapet for the first time defending the supermarket's "poor" performance and promising not to flinch from the tough action required to turn around the ailing UK chain.
At a bad tempered shareholder meeting Tesco's army of small investors turned out to accuse the management of "arrogance" and having lost shoppers' trust.
They also pointed to the supermarket giant's deteriorating financial performance as reflected in its slumping share price. But Sir Richard Broadbent pleaded for patience.
"We know the share price performance has been poor.But it is important that we do not flinch from the decisions needed to shape a competitive business for the future."
The retailer's shares were worth £4 when Philip Clarke took the helm in 2011 but closed at 283.75p, a near six-year low."You and we want to see better performance," continued Broadbent.
"We believe the steps we are taking will deliver better performance in a sustainable fashion for the long-term future of the business." Broadbent has come under fire in recent months amid a stream of senior departures since Sir Terry Leahy retired in 2011.
In his final year as chief executive there were eight executives on the board but that number has now dwindled to two: Clarke and outgoing finance director Laurie McIlwee.
Broadbent, the former deputy chairman of Barclays, defended the position stating that the board's composition was evolving and that it was not wholly surprising there had been a turnover of executives in the wake of Leahy's departure.
In April Clarke reported a third year of falling UK profits and at that time indicated it could take another three years for his turnaround plan, which involves refurbishing Tesco's hundreds of UK stores, to bear fruit.
But he told investors the stores it had already tackled were delivering sales increases of 3%-5% and that the trading momentum was being "sustained".
Clarke, who began his 40-year career at Tesco stacking shelves in a store managed by his father, did not used the platform to return fire against Leahy, who in a recent interview said he was very disappointed with the firm's performance in his absence. The tit for tat started at last year's shareholder meeting.
Tesco grandee Lord MacLaurin attacked Leahy, saying his former protege had "lost the plot" and embarked on a "disastrous" foray into the US. Instead Clarke paid tribute to the previous senior management team.
"Thanks to all the efforts made by my predecessors we have a strong basis to rebuild a new Tesco," he said, adding that all big box retailers are having to reinvent themselves in the internet age.
If Tesco was just an internet and convenience store retailer, "we would be shooting the lights out", he said.
Anthony Lee, one of the hundreds of private shareholders who turned out for the event in central London, suggested the retailer's current woes stemmed from "arrogance" displayed when it was the unassailed market leader.
He also questioned the need to turn its big stores into "destinations" with Harris & Hoole coffee shops and Giraffe restaurants.
"It's not your job to be loved, you're not Madonna or a church," he said. "People just want to be able to buy things in a decent atmosphere."
Another retail shareholder, who did not give his name, laid the blame for the company's problems at Leahy's door, claiming he had lost the company more than £3bn with the ill-fated attempt to break into the US with the Fresh & Easy chain.
"He was paid millions for losing billions," the investor claimed. The meeting was also used as a springboard by campaigning group ShareAction, which wants the retailer to introduce the living wage and handed over a petition with 32,000 signatories.
Its case was made by 11 year-old school boy Lucas Pinto who asked if it would have adopted the pay benchmark by the time he was old enough to work there.
Broadbent said the retailer, which is the UK's largest private sector employer, paid 5-8% more than its major competitors and that once the staff discount, employee share scheme and pension contributions were taken into account its staff earned more than than the living wage rate, which is £8.80 per hour in London and £7.65 elsewhere.
Despite the quarrelsome tone of the meeting all the resolutions were passed with very little dissent. Only 1.14% of votes cast at the meeting opposed Clarke's re-election as a director.
Speaking afterwards Clarke said the criticism was no worse than at the other 16 meetings he had attended as a board director. Indeed the flak, he said "stiffens my resolve to keep going with the strategy we set out rather than just say tear it up and do something else".
theguardian.com
At a bad tempered shareholder meeting Tesco's army of small investors turned out to accuse the management of "arrogance" and having lost shoppers' trust.
They also pointed to the supermarket giant's deteriorating financial performance as reflected in its slumping share price. But Sir Richard Broadbent pleaded for patience.
"We know the share price performance has been poor.But it is important that we do not flinch from the decisions needed to shape a competitive business for the future."
The retailer's shares were worth £4 when Philip Clarke took the helm in 2011 but closed at 283.75p, a near six-year low."You and we want to see better performance," continued Broadbent.
"We believe the steps we are taking will deliver better performance in a sustainable fashion for the long-term future of the business." Broadbent has come under fire in recent months amid a stream of senior departures since Sir Terry Leahy retired in 2011.
In his final year as chief executive there were eight executives on the board but that number has now dwindled to two: Clarke and outgoing finance director Laurie McIlwee.
Broadbent, the former deputy chairman of Barclays, defended the position stating that the board's composition was evolving and that it was not wholly surprising there had been a turnover of executives in the wake of Leahy's departure.
In April Clarke reported a third year of falling UK profits and at that time indicated it could take another three years for his turnaround plan, which involves refurbishing Tesco's hundreds of UK stores, to bear fruit.
But he told investors the stores it had already tackled were delivering sales increases of 3%-5% and that the trading momentum was being "sustained".
Clarke, who began his 40-year career at Tesco stacking shelves in a store managed by his father, did not used the platform to return fire against Leahy, who in a recent interview said he was very disappointed with the firm's performance in his absence. The tit for tat started at last year's shareholder meeting.
Tesco grandee Lord MacLaurin attacked Leahy, saying his former protege had "lost the plot" and embarked on a "disastrous" foray into the US. Instead Clarke paid tribute to the previous senior management team.
"Thanks to all the efforts made by my predecessors we have a strong basis to rebuild a new Tesco," he said, adding that all big box retailers are having to reinvent themselves in the internet age.
If Tesco was just an internet and convenience store retailer, "we would be shooting the lights out", he said.
Anthony Lee, one of the hundreds of private shareholders who turned out for the event in central London, suggested the retailer's current woes stemmed from "arrogance" displayed when it was the unassailed market leader.
He also questioned the need to turn its big stores into "destinations" with Harris & Hoole coffee shops and Giraffe restaurants.
"It's not your job to be loved, you're not Madonna or a church," he said. "People just want to be able to buy things in a decent atmosphere."
Another retail shareholder, who did not give his name, laid the blame for the company's problems at Leahy's door, claiming he had lost the company more than £3bn with the ill-fated attempt to break into the US with the Fresh & Easy chain.
"He was paid millions for losing billions," the investor claimed. The meeting was also used as a springboard by campaigning group ShareAction, which wants the retailer to introduce the living wage and handed over a petition with 32,000 signatories.
Its case was made by 11 year-old school boy Lucas Pinto who asked if it would have adopted the pay benchmark by the time he was old enough to work there.
Broadbent said the retailer, which is the UK's largest private sector employer, paid 5-8% more than its major competitors and that once the staff discount, employee share scheme and pension contributions were taken into account its staff earned more than than the living wage rate, which is £8.80 per hour in London and £7.65 elsewhere.
Despite the quarrelsome tone of the meeting all the resolutions were passed with very little dissent. Only 1.14% of votes cast at the meeting opposed Clarke's re-election as a director.
Speaking afterwards Clarke said the criticism was no worse than at the other 16 meetings he had attended as a board director. Indeed the flak, he said "stiffens my resolve to keep going with the strategy we set out rather than just say tear it up and do something else".
theguardian.com
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