Last week, grocery giant Tesco announced that long-serving UK and Ireland boss Jason Tarry would be stepping down after more than three decades with the retailer.
Tesco said Tarry would be stepping down in March 2024, after more than 33 years at the grocer, the last six as UK chief executive.
The retailer said Tarry’s “leadership has guided Tesco through its turnaround and more recently the pandemic, rebuilding its competitiveness in the UK and putting customers back at the heart of the business”.
While Tarry’s departure will undoubtedly leave a hole in Tesco’s leadership structure, it has moved quickly to replace him with former Aldi UK and Ireland chief executive Matthew Barnes.
“His values and commitment to creating a high-performing, supportive and diverse culture have been key to creating the Tesco we know today”
Tesco chief executive Ken Murphy on Jason Tarry
Barnes was chief executive of Aldi between 2015 and 2018, having joined the discounter as a graduate in 1997. He was subsequently promoted to Aldi Sud’s executive board where he was responsible for many of the discounter’s international businesses as well as its global sourcing, buying and supply chain.
After slowing down during the pandemic, Aldi’s relentless focus on price and expansion of its store estate has enabled it to capitalise on the cost-of-living crisis that has marred the last two years.
In September 2022, it overtook Morrisons as the fourth-largest grocer in the UK. Over 2023, Aldi’s growth has accelerated. In the 12 weeks to October 1, Aldi’s sales rose 14.9% and its total market share jumped 0.6 percentage points to 9.9%, according to the latest Kantar grocery market share data.
What legacy will Tarry leave at Tesco and what will Barnes bring to the supermarket giant in its ongoing rivalry with his former employer?
‘A big sunflower’
Tesco group chief executive Ken Murphy said of Tarry: “Jason has made an immense contribution to our business. Under his leadership, Tesco today is the most competitive we have ever been, built on exceptionally strong foundations of doing the right thing for our customers and colleagues.
“His values and commitment to creating a high-performing, supportive and diverse culture have been key to creating the Tesco we know today.
“I am incredibly grateful to Jason for his leadership of the UK business and his critical role on the executive committee. We have five months until Jason leaves us and I know he will do his utmost to ensure our UK business continues its very strong performance until then, including delivering a winning Christmas.”
Praise for Tarry’s work at Tesco has been near universal. Shore Capital analyst Clive Black said: “A big, towering bloke like Mr Tarry is probably rarely spoken of in terms of a flower blossoming, think a big sunflower, but that is exactly what he has done in a highly commendable 33-year career at Tesco.”
Having previously been chief executive of Tesco’s clothing business, Tarry was named chief product officer in 2015, at the height of the existential crisis facing Tesco in the wake of Philip Clarke’s disastrous tenure.
With many analysts wondering whether Clarke’s successor, Sir Dave Lewis, and his team could save Tesco, Tarry was a “key connection of the best of the lieutenants that worked under the powerhouse board created by Sir Terry Leahy from the 1990s”, says Black. Tarry was “identified and championed by Sir Dave Lewis as a key man in his steps to save the business”.
Retail Week data and insights director Lisa Byfield-Green agrees, saying that under both Lewis and Murphy, Tarry has been instrumental in the grocer’s success and “leaves Tesco in a really strong position”.
“It’s one of the only ‘big four’ grocers to consistently hold market share, despite the cost-of-living crisis. Under Tarry’s leadership, it has managed nine consecutive quarters of switching gains from its premium grocery rivals.”
Tarry will leave Tesco with a hugely enhanced reputation and his name is already being linked in grocery circles to possibly taking the top job at Asda. However, given that he is due to stay at Tesco until March 2024, he will have nothing lined up with a competitor for the time being.
Poacher turned gamekeeper
Analysts agree that Barnes’ appointment is a coup for Tesco, having been one of the key architects of Aldi’s emergence as the scourge of the supermarket establishment.
Black says Barnes has “arguably been the nemesis of the UK supermarket scene… through the past decade or two and so his capture by Tesco is highly noteworthy”.
While expecting Tesco to continue its strategic focus on Clubcard Prices, Aldi Price Match and Everyday Low Prices under Barnes, Black says the grocery industry will be watching how those strategic pillars evolve under the new management “with some bated breath”.
With food inflation slowly decreasing, Byfield-Green says Barnes and Tesco have “an opportunity to tempt customers away from the discounters and back to its full-range offering, particularly as it builds further on its value-for-money credentials”.
She says the biggest challenges for Barnes will be in getting his head around the bigger and more complex operation he will be faced with at Tesco, compared to Aldi, such as its 21 million-strong – and growing – Clubcard ecosystem.
Another new area for Barnes will be with Tesco’s huge online business and ensuring its profitability. Aldi Sud has recently stopped its online Special Buys in the UK and earlier pulled out of a delivery partnership with Deliveroo and reduced the number of available locations for click-and-collect.
“Aldi clearly values profitability above all else,” says Byfield-Green. “With 35% of the UK’s online grocery market, Tesco has a strong ecommerce lead but still struggles to make the channel profitable.
“It will be interesting to see whether this background influences Barnes and whether he might look to make cuts in areas such as Tesco’s rapid-delivery service Whoosh.”
Whatever happens, Byfield-Green says Aldi Sud and Aldi UK “are likely to be concerned, as Barnes brings with him deep insight into the discounter and what has made it so successful”.
While Tarry’s departure will leave huge shoes to fill at Tesco, Barnes is more than capable of walking his own path to success.
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