Long before Amazon became the bogeyman of the High Street, another seemingly unstoppable force was accused of trying to dominate every aspect of retail.
Under former boss Sir Terry Leahy, Tesco had become so successful that more than £1 in every eight spent in Britain’s shops was said to be going through the supermarket giant’s tills.
He bowed out in 2011 after 14 years in charge, having turned it into the world’s third-biggest retailer.
Aisle be back: Former Tesco boss Sir Terry Leahy, has been lined up to take over at Morrisons should private equity firm Clayton Dubilier & Rice advances prove successful
Now, the 65-year-old looks poised for a second act in the highly-competitive groceries sector – this time at one of Tesco’s arch-rivals. Following a £5.5billion bid for Morrisons, the private equity firm Clayton Dubilier & Rice (CDR) is lining up Leahy as chairman should its advances prove successful.
Morrisons has so far rejected the attempted buyout on the grounds that it is too low. But few believe its board will hold out if a higher offer materialises.
As a senior adviser to CDR, Leahy will almost certainly have helped to cook up the plans for Morrisons, and has been parachuted into its takeover targets before.
His proposals include expansion of its convenience store footprint – where it is under-represented when compared to its rivals.
This could involve putting a Morrisons inside every one of CDR-owned Motor Fuel Group’s 900 petrol forecourts in the UK. Leahy serves as chairman of the executive committee at petrol stations.
His career after leaving the biggest job in British retail has certainly been lucrative.
The former council estate boy is thought to have received nearly £20million in basic pay at Tesco, as well as up to £73million worth of share awards and bonuses.
It is not known how much he made from any personal holdings in B&M, which were tucked away in a fund run by CDR.
But he raked in £17million when he sold shares in online retailer The Hut Group last year and still holds another £84.5million worth.
When CDR was about to bid for Morrisons, it was Leahy who made the courtesy phone call to the supermarket’s chairman Andy Higginson.
The two had worked together at Tesco, where Higginson served as group finance and strategy director, later masterminding the grocer’s move into retail banking.
And the Tesco connections do not stop there. David Potts, Morrisons’ chief executive, is a former Tesco shelf-stacker who climbed the ladder to become boss of its Irish division, its UK retail stores and then the Asia business.
Morrisons operating chief Trevor Strain and finance chief Michael Gleeson are both Tesco alumni as well.
But the diaspora of former Tesco staff at the very top of the retail world comes as little surprise to Leahy’s admirers, who say he always surrounded himself with talent. A proud citizen of Liverpool, he is described as intellectually sharp and – most of all – ambitious.
Leahy pictured after taking the Tesco top job in 1997. He left competitors scrambling to catch up as he pushed into new frontiers, pioneering superstores and convenience stores
While boss at Tesco, from 1997 to 2011, Leahy left competitors scrambling to catch up as he pushed into new frontiers, pioneering superstores, convenience stores and even offering banking and mobile services.
Expansions into Europe, Asia and the US remade Tesco into an international force, although the last of the three would come to be seen as a mistake.
When he left, Tesco had 30.5 per cent of UK grocery sales and annual profits of £3.8billion.
That is more than double the record that would be achieved under feted future boss ‘Drastic Dave’ Lewis – although this followed a painful restructuring after what is now seen as a disastrous period under Leahy’s immediate successor, Philip Clarke.
Clive Black, a retail analyst at Shore Capital, said: ‘Terry Leahy is quite simply a phenomenal talent, and at Tesco he surrounded himself with a phenomenally talented team.
‘He made big and bold decisions. It was an ambitious and well-thought-through strategy that was brilliantly executed.’
Baroness Lucy Neville-Rolfe, who moved from Downing Street’s policy unit to be director of corporate and legal affairs under Leahy, partly credits his success to a relentless focus on the customer and his skill in managing people. Neither were common features among chief executives of the day.
She said: ‘Terry was never someone who got in your face or who went around saying “I am the greatest”. He is very ambitious but studied and careful, with a very sharp intelligence.
‘Even after leaving he was determined to have an entire career and to really create some value – and I think everyone was quite amazed by what he did at B&M.’
He was installed as chairman at B&M after CDR bought a controlling stake in the discounter in 2012, overseeing a successful expansion and stock market listing two years later.
If they buy Morrisons, CDR and Leahy are thought to want to keep Potts and other top managers. Yet the path is far from clear and some even believe Amazon, which works with Morrisons to deliver groceries, could emerge as a rival bidder.
That would be tantamount to a battle of retail titans – pitting one High Street bogeyman against another.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.