I'd rather have a bag of cheap potatoes. 

Fired Tesco CEO Couldn't Create 'Amazon Lite'

Mark Gilbert is a Bloomberg Gadfly columnist covering asset management. He previously was a Bloomberg View columnist, and prior to that the London bureau chief for Bloomberg News. He is the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”
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Picture a mom-and-pop convenience store, what we in Britain call a corner shop, where you go when you run out of milk, or you realize that the recipe calls for cashew nuts, or you have a sudden craving for a bar of chocolate. Now imagine that the shopkeepers also make and sell their own computer tablet, offer a television and movie streaming service, and sell digital books and music.

It could almost be Amazon-Lite. And it pretty much describes the recent history of Tesco Plc, Britain's biggest retailer, as Chief Executive Officer Philip Clarke attempted to emulate Jeff Bezos by creating a U.K. version of Amazon's"Everything Store."Tesco's acquisitions in recent years include Blinkbox for films, digital-book platform Mobcast, social media start-up BzzAgent and music platform WE7. I've barely heard of any of them, let alone bought anything from them.

Even after hearing Clarke describe his strategy in person earlier this year, I struggled to understand why anyone would feel the need to buy digital content from a grocer, no matter how loyal they are to its fruit and vegetables. Sure, all retailers need a vibrant online presence, and Clarke's boasts about hiring an army of research and development staff and programmers made sense as technology becomes ever-more important for all kinds of businesses. But inventing your own version of the iPad or the Kindle -- Tesco's is called the Hudl, since you asked -- smacks of hubris.

Clarke was ousted today, as Tesco's board decided a worsening profit outlook made it time for a new chief. It's a sad ending for Clarke, 54, who joined Tesco as a graduate trainee in 1981 and has been in the top job for a bit more than three years. With Tesco squeezed in food retailing between cut-price chains including Aldi and upmarket stores such as Waitrose, you can admire Clarke's efforts to differentiate it by building a one-stop online experience; yet investors, as this chart shows, have remained nonplussed:

Tesco needs to get back to basics. The $850 million Clarke invested in his online adventures in 2013 was triple what he spent on cutting prices, as Tesco suffered its worse same-store sales slump in a decade. Today's figures show the company's domestic market share dropping to 28.9 percent from 30.2 percent

"I see competition emerging from non-traditional retailers, and I watch all of them," Clarke told Bloomberg reporter Gabi Thesing in April. "I've always been impressed with Amazon." Well, everyone is impressed by Amazon, and rightly so; that doesn't mean everyone can be Amazon.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mark Gilbert at magilbert@bloomberg.net

To contact the editor on this story:
Toby Harshaw at tharshaw@bloomberg.net