Small shop closures are progress, says ex-Tesco boss

Sir Terry Leahy Sir Terry Leahy was instrumental in the rise of Tesco to become Britain's biggest retailer

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The former boss of Tesco has described the rise of supermarkets and closure of small shops as "part of progress".

Speaking on BBC Radio 4's Desert Island Discs, Sir Terry Leahy also called some High Streets "medieval", saying the way people lived their lives had changed.

Sir Terry said seeing boarded up local shops was sad, but this happened because consumers were choosing to shop at the bigger supermarkets.

The benefits of out-of-town stores outweighed the downsides, he added.

When asked if he thought it was just "tough" that a family butcher had to close because it couldn't compete with the "three-quid chicken" sold at the supermarket, he said: "Small benefits for thousands of families can be a big loss for the family of the butcher but you can never be casual about it.

"You have to ensure the better organisations come through."

Start Quote

I felt very strongly inside that Tesco was doing the right thing... but I realised I wasn't winning the argument for some people.”

End Quote Sir Terry Leahy Former Tesco boss

Sir Terry got his first job at a Tesco in Wandsworth, London, when he was 17-years-old so he could support himself during sixth form college.

The third of four sons, he grew up in a prefab on an estate in Liverpool. His father was a greyhound trainer and his mother was a nurse.

He said he couldn't please everybody when it came to views on supermarkets over small High Street stores.

"If you talk to people, 95% of the population quite like supermarkets but 5% don't, but in Britain this (5%) is three million people so they have a right to say what they think.

"I felt very strongly inside that Tesco was doing the right thing, in terms of how it was conducting its business, how it was serving ordinary people and how it was employing ordinary people but I realised I wasn't winning the argument for some people."

Large chains

The British Independent Retailers Association said 98% of the the UK's £150bn grocery industry was controlled by just nine stores.

But deputy chief executive Michael Weedon claimed there could be a silver lining for smaller businesses.

He said as large chains such as HMV and Blockbuster closed, more retail premises would become available at cheaper rents.

Among the tracks Sir Terry chose to take with him to a desert island were The Beatles' I Want To Hold Your Hand, Simon & Garfunkel's Homeward Bound, Depeche Mode's Just Can't Get Enough and Pachelbel's Canon in D.

He said he would also take The Complete Works of Charles Dickens and his luxury item would be tea.

As chief executive, he made his name transforming the supermarket from a lacklustre brand into Britain's biggest retailer.

Desert Island Discs with Sir Terry Leahy was broadcast on BBC Radio 4 at 11:15 GMT on Sunday 3 February


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  • rate this

    Comment number 419.

    I dare say once all the out-of-town supermarkets have a complete stranglehold, they'll start to charge their customers to park there too!

  • rate this

    Comment number 418.

    Forced? We go to Tesco because it is more convenient, has better selection, and generally better value than individual small shops. We like Tesco, that is why we choose it over the high street. If people preferred the high street, they would go there. So what's the fuss about? Terry Leahy is spot on: Tesco giving consumers what they want.

  • rate this

    Comment number 417.

    186: When Tescos wish to open a large store they should be forced to allow the construction of rows of small shops along two sides of the car park in order to provide competition . . .

    And while we are about it let's make Dewhursts provides space for the health-food types and Waterstones for CD-buyers. Why should Tesco or anybody else fund their competitors.

    Grow up.

  • rate this

    Comment number 416.

    I agree with at least one previous correspondent that high rents and rates are cause of the decline in town centre. But the biggest reason is the difficulty of getting into town centres and the cost of parking if you can find anywhere to park! Councils see motorists as milch cows to be bled for every last penny, not improving traffic flows or free parking.
    Visit Brigg to see it done properly!

  • rate this

    Comment number 415.

    People always they prefer local shops, but these are very restrictive in my view. I work unsociable hours and finish at 2am Supermarkets are the only shops open at this hour, so that's where I shop. If smaller independent shops are to survive they need to be more flexible in their opening hours. The majority work between 9-5 which is when these shops are open, they then are shut after 5pm

  • rate this

    Comment number 414.

    Leahy manages to ram his foot even further into his mouth than Barclays' Bob Diamond saying its time to 'stop criticizing bankers' or Ratner's infamous 'total cr*p'.. common sense would suggest Mr Leahy, that when corporate strategies favor the cartel and not the public (as usual), you keep quite..very quite..rather than make gobsmackingly arrogant public statements about your real motivations...

  • rate this

    Comment number 413.

    Sir Terry Leahy calls it progress.

    I call it the cost of capitalism on community.

    Companies with aggressive business plans like this have destroyed towns and villages & have helped the damage we have seen to communities over recent decades. My local store, having decimated other businesses in the area even turned its sights on the little local key-cutter. I'm sure they could live without that.

  • rate this

    Comment number 412.

    Our local Councils are responsible for the failure of our High Streets!
    Why do I say this?.
    I stay on the outskirts of Glasgow and I avoid going into the Town Centre like the plague.No parking,Neo nazi traffic Wardens, pedestrianization of streets,Insane one way system etc etc.
    When will they learn Cars are the choice of transport for the majority, and we want to use them to go places.

  • rate this

    Comment number 411.

    This is a cash rich time poor economy, visiting dozens of small independent shops is an inefficient means of procuring goods. Independent retailers need to adapt their distribution model... if they can make reliable timely deliveries they can compete on convenience and increase their catchment area...

  • rate this

    Comment number 410.

    I thought successful private companies that 'create wealth' and provide loads of jobs were a good thing HYS?

  • rate this

    Comment number 409.

    When the supermarkets are driven out of business because online grocery shopping clubs prove cheaper and more convenient, I wonder if Mr. Leahy will accept his obsolescence with the grace he implies high-street retailers ought to? Somehow I doubt it....

  • rate this

    Comment number 408.

    Having experienced the joys of shops with short opening hours, being closed for lunch (!), limited range of overpriced and unfresh goods, all sold by a shopkeeper who appears to think he is the one doing you a favour, all I can say is 'thank you' to the supermarkets.

    Amazing that people actually complain that supermarkets having lower prices, so 'forcing' people to get a better service!

  • rate this

    Comment number 407.

    I'm sick of people saying that supermarkets are cheaper - I reckon you break even compared to indi shops

    Some things are cheaper, but there's a lot of things that are a lot more expensive. e.g. Morrisons - 6 medium eggs - £1.65, the Londis on my street 6 LARGE eggs £1.20.

    Morrisons, 1 red pepper 88p, the indi veg shop, 47p

    People just accept that supermarket price are the only prices!

  • rate this

    Comment number 406.

    How to lose customers in one easy lesson, I will never set foot in Tesco again!
    We have lost so many retailers because supermarkets no longer just sell food, its beer wine and spirits, technology, dvd's and music etc etc.
    Supermarkets sell these products using accountants to pay as little tax as possible whilst selling horse burgers!
    Why has no action been taken by trading standards?

  • Comment number 405.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 404.

    I have mixed feeling on this. I find the idea of small shops appealing, bu the reality was less desirable. Poor customer service and high mark-ups killed them off. I bought something in a small shop fro £6 and found it in a pound shop[ for £1. And being on a low income I can't afford small shops. Their own lack of care about poorer customers has killed them! Customers cant afford them!

  • rate this

    Comment number 403.

    Whoever thought the business sector were honest really needs to learn about it. This shows what the Tory supporting fat cats are all about. Crushing the competition to maximise their own profits. Not sure about progress but it's certainly what business is about.

  • rate this

    Comment number 402.

    Recent media reports revealed how some supermarkets also have a stake in smaller shops, so what part of Leahy's vison of progress it this?

    A while ago, a media report came out about community owned supermarket, people collected free farm produce which would otherwise be left rotting.

    My community has an allotment system. Many grow their own foods now.

  • rate this

    Comment number 401.

    The large supermarkets like to perpetuate the myth that they offer the widest range of goods at the best prices. My experience is that Tescos are often more expensive (e.g. on meat) and the items I want are often out of stock or discontinued. I shop in a range of places for the best products and deals, and they are not all large supermarkets. Try it for yourself.

  • rate this

    Comment number 400.

    I always shop locally in fruit and veg shops etc..etc..! Luckily there is a few independent shops a walk away. I would never give money to the machines that are the supermarkets...bad quality food filled with nasty chemicals at an exortionate price!


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