So what do former Manchester United manager David Moyes and Tesco (LSE: TSCO) chief executive Philip Clarke have in common? Worryingly for investors in the supermarket giant, rather too much.
Both men had tough acts to follow in long-serving legends Sir Alex Ferguson and Sir Terry Leahy. Moyes was clearly out of his depth from the start. Clarke has still to convince investors and analysts that he can rise to the challenge.
There is also the sneaking suspicion that Sir Alex and Sir Terry got out just in time. Manchester United and Tesco both look like great brands in long-term decline. Both have seen a long-standing rival sharpen up their act, in Liverpool and J Sainsbury respectively. Tesco losing market share to cut-price operations Aldi and Lidl is akin to United’s home defeats to Swansea and West Bromwich Albion. And we know how that ended for Moyes.
Hey, Big Spenders!
Moyes tried spending his way out of trouble, lavishing £37 million on misfiring playmaker Juan Mata. Clarke also has millions at his disposal, and has pledged to win back shoppers by using his war chest to fund 30 price cuts. Both moves smack of panic. Let’s hope Clarke gets a better return on his investments.
Moyes never won over his senior players. Clarke has also had rumoured staff fall-outs, notably with recently departed finance director Laurie McIlwee. He is now the only permanent executive in Tesco’s senior management, which means that, like United, Tesco now has a succession planning headache.
Like David Moyes, Clarke has dismissed calls to resign, and says he can turn things round, given time. Judge me by the quality of my revamped stores, he replies, as shareholders call for him to quit. Football is more fickle than the FTSE — Moyes wasn’t even allowed one year of poor results. Clarke has survived two. Three could finish him.
Theatre Of Nightmares
There are differences as well. Moyes’ unfortunate tenure earned him £7 million, including compensation, whereas Clarke turned down his bonuses in the last two years due to poor results (he still makes more than £1 million a year, however). While confidence visibly drained from Moyes, Clarke still talks a good game, recently claiming “We have a big and bold plan” to turn the company round.Â
Manchester United remains a potent international brand, while Tesco’s attempts to go global have largely fallen flat, with sales now falling in Ireland, Hungary, Poland and the Czech Republic, on top of the US Fresh & Easy debacle. United are massive in Asia, Tesco are flailing, with the recent 9.1% drop in sales in Thailand.
The biggest difference is that Clarke still has his job. But unless results improve, that could swiftly change.