Tesco boss Sir Terry Leahy’s recipe for greener Britain and better NHS

Alice Thomson and Rachel Sylvester: The Saturday Interview
Sir Terry Leahy became chief executive of Tesco in 1997, just as Tony Blair was walking through the door of No 10. Within ten years he had turned the “pile it high and sell it cheap” food chain into a global supermarket brand. Tesco became new Labour’s success story, a red, white and blue symbol of the classless society where everyone from the dustman to the duchess could pick up a pint of milk.
Even as the Government stumbled and the country went into recession, the company went from strength to strength. Now £1 in every £6 spent on the high street goes to Tesco and it employs 470,000 people worldwide and runs 4,308 stores.
Sir Terry, the Everton fan who grew up in a prefab, has always been one step ahead of the consumer. He knows when the West Country has been converted to couscous and how much Hackney is willing to pay for a pound of cheese. He can do fair trade, budget, gourmet and green.
Politicians love to court the supermarket king, who works out of an unprepossessing industrial estate in Hertfordshire. Labour has studied the Tesco Clubcard to learn how to reach niche groups in an election. Now the Tories are discussing everything from education to eco-homes with the man who has his finger on the pulse of Middle England.

Sir Terry’s next project is to save the planet. Yesterday he announced an agreement between 30 global corporations, including Coca-Cola, Unilever and News International, which owns The Times, before the Copenhagen summit on climate change. “It is going to take a long time for countries to reduce their carbon emissions but consumers can do it overnight just by changing their behaviour. We need a second consumer revolution,” he says.
He thinks that Tesco customers are ready. The supermarket will put carbon footprints on hundreds of products, making clear the environmental damage they cause. Sir Terry plans to replace “buy one, get one free” offers, which he thinks encourage waste, with “buy one, get one free later” deals. As part of an effort to become carbon neutral by 2050, he will install green refrigerators, windmills and generators in Tesco stores. “The rise of mass consumption was a miracle of the 20th century. Everyone wanted a better life, from Britain to Asia, but we can’t keep doing it in such a carbon-insensitive way.”
Companies must turn consumers into part of the solution. “You need to work with the grain of human nature. If you force people, they don’t take on board the reason for the change and alter their wider behaviour. Take cars and petrol: there is a huge tax on it but it didn’t change how much they drove. You have to get society to make lowcarbon living desirable and cool. People used to see success as living in a mansion in America. Now it has to be a zero-carbon house and an electric sports car.”
Sir Terry has turned his 1930s suburban family home into a green grotto. “I have solar panels, new boilers and a hybrid car. We do all our own recycling and compost and water recovery. I don’t want to portray myself as a green zealot — it would be better to say I was an ordinary agnostic — but the science is incontrovertible and the implications are terrible, so I do what an ordinary person does.”
Will he stop selling green beans from Zambia? “It may be bad to fly in goods but then growing food under glass in Europe may be as bad,” he replies. “If you start saying you can only eat in season or eat British, it doesn’t work. If you start deciding for people how they live their lives you make mistakes — they know their own lives best. On a grand scale that becomes state planning of the economy, and that makes for lousy decisions.”
He is reluctant to promise to cut packaging. “That’s more complicated because we don’t make anything but we have reduced the number of plastic bags by 50 per cent in two years. It’s been done voluntarily: if you re-use a bag you get a Clubcard point.”
One problem is that supermarkets, led by Tesco, have encouraged people to stop using local shops and to drive to out-of-town stores. Surely Sir Terry must see a contradiction between this and his new green message?
“The rise of the modern supermarket just reflects the changing needs of families — more women working, people having less time and more disposable income.” His wife, Alison, works as a doctor and they share the weekly Tesco trip.
As a child, he went to the shops with his mother every day. “We were about six miles from the city centre. There was a little sweetshop, a grocer’s, a greengrocer’s and a butcher’s. You queued in each of them for the little they had, then you went to town to the department store to buy a slice of ham and look at the other things that you couldn’t afford to buy.
“I passionately believe supermarkets have been part of democracy in Britain — they’ve given people huge power over their lives, they’ve been liberating for women.” Sir Terry admits that he feels some guilt about forcing small shopkeepers out of business. “But the truth is this is part of change, it’s the creative destruction of markets. With winners come losers.” Critics say that the “Tescofication” of Britain has created clone towns, mushroom-risotto identi-food and Identikit grey uniforms for children. But Sir Terry defends the dominance of his brand.
“Around the world people choose the same things. The iPhone is chosen in Brazil, Japan and North America because it is better. It’s a democratic choice, but the price of that is you don’t get cultural variety.”
How has he stopped people from tiring of Tesco? “We are very counter to management theory which says you have to have your niche market. Whether you’re on income support or you’re a millionaire, you get treated the same. You have to give a lot up because it’s not completely bespoke, but it fits reasonably well, so you think the compromises you make are worth it for what you get back.”
The public services need to perform the same trick. Sir Terry thinks that government has become too controlling and centralised. “All my business experience has taught me that people are pretty wise and know what is best for their lives. You’ve got to put responsibility locally and trust people. There’s no officer class at Tesco, it doesn’t matter what your background is, you can get to the top. We trust people to take decisions on the ground.”
Too many Whitehall targets, he says, have been counterproductive. “It’s better to have teams on the ground with more authority. Take the NHS, there are many incredible specialisms, from cleaning to anaesthetics, that have to come together. That’s hard to do from a long way away.”
As one of the biggest employers in Britain, he thinks that the education system is failing. “Too many schools aren’t good enough. I don’t think that’s a controversial statement.” The answer is better teachers. “Teaching has got to be a more important profession in society — better paid and with more talented people going into it.” Tesco already has 800 apprentices and a degree course. Would Sir Terry consider helping the Tories with their free schools? “Tesco would always work constructively with the government of the day on the programmes that they’re trying to achieve.”
He is an obvious candidate for a peerage and a ministerial post in a Cameron administration but he insists that he would never go into politics. “I wouldn’t be any good at it, for a start. I’m a private person, this is about as public a role as I would ever want to do.”
The man who started out stacking shelves and washing floors says that he has never wanted to be a banker either. For him, running a supermarket is a form of public service. “I’ve never done it for the money. Some people run away from their background, I never have. I’m very comfortable in Liverpool. Essentially I’m still working-class.”
CVBorn February 28, 1956 Education St Edward’s College, Liverpool. University of Manchester Institute of Science and Technology Career 1978: management trainee at Co-op. 1979: Tesco marketing executive. 1992: Tesco marketing director. 1997: Chief executive. Salary £1.3 million Family Married to Alison, a doctor, with three children Interests Special adviser to Everton Football Club
Quick-fireEverton or Liverpool? Everton Sushi or sausages? Sausages Suburbs or rural? Suburbs Are You Being Served? or The Good Life?Are You Being Served?V-necks or round-necks? V-neck Tesco Finest or two-for-one? Tesco Finest