Philip Clarke sets out to calm shoppers over contaminated beefburgers saying chain will not be ‘hiding behind suppliers’
Philip Clarke, the chief executive of Tesco, has taken to his Talking Shop blog to hammer home the message that the supermarket chain is taking the horsemeat scandal head on.
“If some of our customers are angry, so are we,” he wrote. “We expect our suppliers to deliver to a standard, and to meet basic food traceability rules. But our customers shop with Tesco, not our suppliers, so you won’t find us hiding behind suppliers.”
Clarke’s reaction, according to retail analysts, was part of a textbook response to the scandal that could yet see the company avoid long-term damage to its reputation following the discovery of horsemeat in some of its beefburgers.
“I don’t think they have put a step wrong so far,” said Neil Saunders, from the retail analysts Conlumino. “Obviously they would have preferred this didn’t happen but it has and they have admitted what has happened, they have informed the public and they haven’t hidden anything. They have withdrawn all the products and they have promised to keep people updated … it has been a very responsible reaction.”
According to his blog, Clarke first heard on Tuesday afternoon that horsemeat had been found in three frozen beefburger lines sold by Tesco. Since then, the company has tried to get on the front foot, issuing a swift apology, withdrawing product lines and placing prominent apologies in national newspapers.
“People may still have concerns over food in the meat and the ready meals sections, but the company’s actions mean that people will be able to trust Tesco’s response and they will see the company as having been open and frank,” said Saunders.
Caroline Gulliver, an analyst at Espirito Santo Investment Bank, said the scandal was “likely to, at least temporarily, reduce consumers’ trust in the quality of Tesco’s products”, which could reduce sales of burgers and other processed meat.
According to figures from the market analysts Mintel, 89,000 tonnes of burgers, worth £481m, was sold in 2011.
But Saunders said that a short-term slump in sales could end up being the least of Tesco’s problems. “Over the longer term, people may just have a little bit of doubt over what Tesco are selling and question the ethics and values of the company, and that could be a real problem.”
Developments over the next 48 hours would be crucial, he said. If it transpired that the horsemeat had entered the food chain due to an accident or human error, the damage could be manageable, but if it arose from cost-cutting, either by Tesco or its suppliers, there could be in trouble for the firm – especially if that could be tracked back months or even years.
“If this is linked to cutting costs out of the supply chain, it will be serious because we know grocers put a tremendous amount of pressure on suppliers to keep costs down, and there will be a lot less public sympathy for the company’s position.”