Tuesday 26 August 2014 3:27 am

Carve Tesco into three, says former director


Catherine Neilan is head of politics and investigations at City A.M.

Catherine Neilan is head of politics and investigations at City A.M.

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A former Tesco executive has called for the business to be radically restructured by its incoming boss, creating three separate entities.
 
Bruno Monteyne, an analyst at Bernstein Research and previously Tesco.com's development director, has argued that carving the supermarket up could be the only way to halt its decline. 
 
He suggests dividing it to create a high-end “Finest” operation that could compete with the likes of Waitrose, a standard Tesco operation and a discount chain to take on budget grocers such as Aldi and Lidl. 
 
Monteyne said: 
 
“Splitting themselves into different channels allows them to use different strategies with different customers….
 
“Rip out 20 per cent of the range, have cheaper shelving and cheaper products in the more deprived areas and give customers a better deal. In London, where people want someone behind the counter who knows the difference between a parma ham and a serrano ham, that requires more investment.” 
 
His note acknowledged the idea was “radical” but insisted it was “exactly what Tesco needs”. 
 
 
One of the major reasons for its underperformance is that the budget supermarkets have stolen chunks of market share since launching in the UK, while consumers at the other end have traded up to John Lewis Partnership's Waitrose and Marks & Spencer (though the latter is suffering from its own woes on the clothing side). 
 
Clarke is being replaced by the global head of Unilever’s personal care division Dave Lewis, who joins in October. 

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