Tesco pays the price for greed

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HOW the mighty have fallen. Three and a half years ago, Tesco’s financial fortunes appeared to be impregnable. It was racking up profits of £9.3m a day – £3.4bn a year – when chief executive Sir Terry Leahy stepped down.

Like Sir Alex Ferguson at Manchester United, Sir Terry chose the right time to leave. Since then Tesco’s results have been in freefall and £1bn was wiped off the firm’s value yesterday following the posting of pre-tax profits of £112m for the last six months.

This was not been helped by a £263m accounting blunder, a state of affairs that prompted Tesco chairman Sir Richard Broadbent to announce his resignation yesterday just a month after insisting that he would not do so.

Some will have little sympathy for the food giant because its financial clout has led to the closure of independent shops and forced farmers to accept paltry sums for their produce. Tesco critics will also point to how the supermarket chain has bought up prime development sites to prevent its rivals from opening new stores.

Nevertheless, some business context is required. Tesco remains a British success story and it is still one of the country’s largest employers. That should not be forgotten.

But it is guilty of overlooking the most important people – its 
once-loyal customers.

By focusing so much on the financial bottom line, and then looking to expand into overseas markets, Tesco appeared to forget that it was a supermarket – “every little helps” was 
its slogan under Sir Terry – and that its shoppers had seen their own incomes squeezed by the cost of living crisis.

And like the banks whose reckless expansionism exacerbated the financial crash, it is a salutory reminder that no business is too big to fail – especially in the supermarket sector where discount retailers like Aldi and Lidl recoginise that “value for money” is a priceless concept.

Learning lessons

Yorkshire must make the grade

NOW THAT the number-crunchers have carried out a detailed analysis of this summer’s GCSE exam results, some perspective is required – and there’s some extra homework for policy-makers during the half-term holiday.

The good news is that more than half of pupils from this region – 53 per cent to be precise – achieved the national benchmark of passing five or more GCSEs, including English and maths, at Grade C or better. It would be churlish not to acknowledge this endeavour.

The bad news is that 47 per cent of youngsters – nearly half – did not make the grade and attainment levels in Bradford, Hull and Barnsley are lagging behind neighbouring LEAs and the rest of the country.

The temptation will be to attribute this to the introduction of tougher exams by Michael Gove, the former Education Secretary. This mindset should be resisted. Even under the previous regime, this triumvirate of local authorities found themselves rooted near the bottom of national league tables – despite countless initiatives over the past two decades or so to drive up standards. Why is this? It is a question still to be answered. Is it the quality of teaching? Or the lack of parental involvement? Or are primary schools failing to teach the basics? So the list goes on.

Perhaps the time has come for closer partnerships between schools and local businesses. For, if pupils learn from entrepreneurs and others about the importance of their GCSE exams, they may just start to knuckle down and make the most of their education.

A new direction

The way forward for rural buses

ARE RURAL residents entitled to a regular bus service – and who should the foot the bill? Two perennial questions, they have even more pertinent as North Yorkshire County Council looks to review public transport provision as it tries to balance its books.

It is a difficult dilemma. Rural householders are taxpayers too and will argue, with a degree of justification, that they should not be penalised by policy-makers. Others, however, will argue that it is their choice to live in remote locations and this expense is simply unsustainable.

However this simplistic viewpoint overlooks the fact that there are families steeped in the countryside who are struggling to run a car because of the cost – and that a skeleton public transport service is their lifeline. Perhaps a starting point is for North Yorkshire councillors to determine the type of service that they would like to provide – and then see if it is feasible and achievable. It is one way forward.