Property was at the heart of Tesco’s troubles

Former Tesco boss Sir Terry Leahy used the half hour to point the finger of blame for the grocer’s fall from grace at pretty much everyone and everything (except himself).

Consumer trust had been “eroded” since Sir Terry’s departure in 2010 and there had been a “failure of leadership” during the reign of Philip Clarke, alleged the normally publicity shy Sir Terry (presumably to deflect any scrutiny of his own role).

A bit rich, wasn’t it? After all, it was on his watch that the retailer embarked on misguided overseas expansion into markets like Japan and the US. In both countries, it launched the wrong formats in the wrong locations, with costly consequences - exiting its US grocery chain Fresh & Easy involved a £1.2bn write-down alone.

It was also during Sir Terry’s tenure that the company embarked on an aggressive land grab as the supermarket space race accelerated. This strategy resulted in the company writing down the value of its UK property portfolio by £804m in 2013, after it identified more than 100 sites that it no longer intended to develop - in its most recent trading update, the retailer announced plans to mothball a further 49 sites and close 43 stores that no longer fit its strategy.

An ongoing series of sale and leaseback deals (some of the proceeds of which were no doubt used to fund its overseas expansion and land grab) during Sir Terry’s reign also saw the retailer - one of the UK’s largest landlords - offload a chunk of its freehold sites, leaving it with the smallest percentage of stores under its ownership of the big four.

That is not to say that Tesco stalwart Clarke is entirely blameless: he clearly made a number of bad moves. However, many analysts liken his plight to that of David Moyes, who had a similarly torrid time at Manchester United when he tried to follow in the footsteps of the legendary Sir Alex Ferguson (a fitting analogy given Sir Terry is a die-hard Toffee). Like Moyes, Clarke inherited a winning team that had enjoyed years of profit growth prior to his ascension to the throne. But many thought that the rot had already started to set in and Moyes and Clarke never really stood a chance.

The responsibility has now fallen to Louis van Gaal and former Unilever boss ‘Drastic’ Dave Lewis to implement the changes needed to steer their respective ships back on course. Van Gaal seems to be making his mark, although you never know in football whether he’ll be around long enough to see his plans through. As for Tesco, it still endured a like-for-like sales slump over the festive period - traditionally the most profitable time of the year for the supermarkets - but it fared better than many analysts expected and the financial markets have responded favourably to Lewis’ vision for the business.

There is likely to be further pain before there are gains as the retailer ploughs its resources into a fierce price war with its rivals in a bid to win ground back from the discounters, with a further write-down of its property portfolio expected. However, as one supermarket expert observed this week, Lewis appears to be making decisions that are right for the business rather than trying to appease analysts - a trap that some accused Sir Terry and Clarke of falling for. If he continues down this path, it is only a matter of time before Tesco bounces back. I wouldn’t write off any of the others yet either. There is much talk of whether four will become three, but that would be a big shout. For one, it assumes the rise of the discounters is relentless and I’m not convinced.

What I am sure of, to change gear with a crunch, is that this year’s Property Awards are going to be the best ever. To celebrate the 20th year of the awards, we’re launching a one-off special award for the most innovative development of the past 20 years. Don’t pass up the opportunity to get involved in picking the winner!