Adam Leyland interviewed all four, along with insiders, ex-colleagues, rivals, analysts and other senior industry sources
The waiting is almost over. After six months in the job, new CEO Marc Bolland will present, this Tuesday, his blueprint for Marks & Spencer at a trading update to the City.
To say his words will be eagerly anticipated is an understatement. The role attracts unnaturally high media scrutiny, reflecting the 'national treasure' status of M&S along with Auntie and the NHS.
And, while Bolland comes with a formidable reputation following his hugely successful three-year stewardship at Morrisons, a hefty incentive scheme estimated at £36m over the next five years will ensure his every move is painstakingly dissected.
But it's the novelty value that makes Bolland's update so intriguing. For the Dutchman is an outsider in every sense: an external appointment in an organisation known for cherishing its own, Bolland is also new to fashion; new to convenience; and new to franchising.
"Bolland is an unknown quantity so far as M&S is concerned," says a former M&S insider. "That can be both a strength and a weakness. Sir Stuart has been in the game for 40 years, and knows the business like the back of his hand, but he wears his heart on his sleeve, which meant his next move was quite easy to predict. No-one can predict with the same level of certainty what Bolland will do, how he will behave."
And Bolland's spell at Morrisons will provide few clues, the source adds. "Marc faces a completely different set of challenges at M&S. Indeed, with Sir Stuart's turnaround of the business in the past 12 months, the challenges Bolland faces are not even the same, and might even be tougher."
Amid feverish speculation this week, it was reported that M&S was planning to buy back some European stores sold off by Roger Holmes and Luc Vandevelde at the turn of the century Bolland will start his presentation with one certainty: he is by no means the only unknown quantity at the top of the retail leader board. Indeed, for that, he might even be responsible.
For Bolland's appointment to the M&S role has turned out to be the catalyst for a changing of the guard in grocery retail the like of which has never been seen before.
In less than six months, new leaders have been recruited or promoted at Asda, Morrisons and M&S, together with Lidl and Aldi. And though it seems impossible to imagine Tesco without Sir Terry like Man U without Sir Alex Ferguson come the end of February, he will be gone.
"It's unprecedented," says Sue Shipley at headhunter Odgers & Berndtson. "In less than 12 months, the face of grocery retail will have been radically transformed by a new generation offering pace, energy and a fresh perspective."
Some industry observers are puzzled by the timing. "Is the changing of the guard a coincidence or part of a pattern?" asks Michael Jary, worldwide managing partner at management consultancy firm OC&C. "In banking we have seen similar upheaval in recent months, as the leadership has battled through the worst of the credit crunch and is utterly exhausted.
"Behind the decision in grocery may lie a different motivation: a fear that the next cycle is going to be a lot tougher. If your track record is reasonably strong as it most certainly is for Sir Terry and Andy Bond it's a good moment to bow out."
Bond's decision to take up a part-time role as Asda chairman while subsequently spearheading Walmart's acquisition of South African chain Massmart came just weeks after Bolland's appointment, and there has been speculation that the two events were connected. Either way, Bond's departure has itself triggered considerable upheaval within Asda.
The appointment of COO Andy Clarke as Asda's new CEO offers continuity, but there's been a six-month hiatus on the commercial side after Darren Blackhurst reportedly stormed out in protest at Clarke's promotion. This week Clarke completed the appointment of a new COO, Simon King, a former Tesco and Safeway exec who is currently CEO of Panda Retail, a Saudi supermarket chain.
Another unknown quantity will be Blackhurst's replacement by the American Charles Redfield. In a subtle dig at Redfield's predecessor, Clarke describes the former director of food at Walmart's Sam's Club as "absolutely in tune with my way of thinking. We are a people company. He will build relationships with colleagues and vendors. And, at the same time, he will unlock the global leverage of Walmart.
"Charles has a very strong non-food track record; and a strong food background at both Sam's and Walmart, so that's a real strength to us as we improve our ranging.
A jetsetter lands in Bradford
The announcement on 27 January of Bolland's replacement at Morrisons is every bit as intriguing, however.
A virtual unknown in British retail circles, Philips hails from County Wick, but the Esperanto-like vowels attest to a retail career travelling the globe Dublin, Sao Paolo, Wuppertal, Harvard, Ontario, etc. No-one expected the jetsetting Irishman to land at Bradford, however.
"My first reaction was: who the fuck is Dalton?" recalls a senior fmcg sales director.
How important is this international experience to Philips? "Immensely. Acutely. Massively. There are ideas I've seen abroad that I intend to use."Philips has already acted swiftly: before Asda had even got its act together, he had hired highly regarded Waitrose commercial director Richard Hodgson from under the noses of his former Leeds colleagues; and he's moved Morrisons veteran Martyn Jones into a new public affairs role.
The upheaval doesn't stop there. Even Tesco's much-admired succession planning which will see international boss Philip Clarke stepping in to Sir Terry's shoes from March involves change and uncertainty.Richard Brasher, a 25-year veteran of Tesco's UK business, will ensure continuity as the new UK CEO.
"Richard is a man of supreme judgement and I would expect Tesco's surefootedness to continue under him," says a senior industry source.
But one of the burning questions is bound to concern who Brasher will appoint to take on his commercial role, along with a successor to David Potts. The current UK management structure is understood to be "no guide to the future" as he ponders his options for a new Tesco UK board.
"I don't have a particular bent in terms of types of people, my choices are fairly eclectic, and I'm prepared to be imaginative. Hiring John Hoerner wouldn't have been the first choice of many to run non-food. But it seemed to work out OK."
To Brasher the restructure is a huge opportunity, however, and though "Sir Terry always plays to the whistle", he is chomping at the bit. "Change is good. We're always excited by it. We like stable management and people who've grown up in Tesco, and to that extent we're quite predictable," he says. "But of course I'm going to change things. It's very exciting for the UK to regain its own identity, with its own board. I've got the opportunity to run the largest operation in the UK and to give my complete attention to it, so it can continue to change and evolve. The appetite has never been greater."
And the industry source adds: "Terry has made the claim that he wants Tesco to be as strong in non-food as food. They've never done it as well as they would like, but with Richard in this mood, be afraid."
Shrewd and analytical, Brasher believes the challenge is not the minutiae but how you put the pieces together. "The trick you have to look for, structurally, is ideas that give you opportunity over time. Loyalty. Services. Bank. How do you join the dots to create one competence, one service?"
With top-level change across the board, one senior grocery retailer believes the retail establishment will now find it harder to read the competition. But Brasher says: "I never spent that much time trying to double guess what my competitors were up to. Of course, it was easier to predict what Sir Ken might do than what Marc did or the new fella, because he had strongly held views. But I'm sure we'll all enjoy watching how the new people perform."
Nevertheless, with Tesco and its rivals taking seven-and-a half weeks to fully react to Asda's price war on basics such as milk, some senior industry sources have noted an unpredictability to Asda's tactics, in particular. Brasher sees it as "part of the rough and tumble" and notes that Asda has picked milk and other staples before. But one supermarket CEO believes that, with Asda share declining, "Asda is behaving like a wounded animal".
And a leading wholesale CEO adds: "A war on milk and bread does little to drive footfall or increase basket size, while margin is eroded. It's a strange decision."
Clarke insists the move marks a return to EDLP. "With the team, I made the decision that commodities, and milk in particular, were important, and felt we needed to make an investment. We've got 200 dedicated farmers and the great news is it's resulted in significant double-digit increases in milk volumes."
In such a challenging market Clarke believes the new focus is "the right thing to do" for our customers. Such protestations should always be taken with a slight pinch of salt. But Clarke, a former shelf stacker, has retained a rare humility, and clearly values team ethics and team building. "I am a very open, transparent person," he says. "I lead from the front, and coach along the way."
Such honesty has already landed Clarke in hot water as his remarks about Asda's quality issues led to media reports suggesting Clarke had 'done a Ratner'. What Clarke's confession failed to convey was the comprehensive review already under way to relaunch Asda's value range a feature notably absent from Ratner's suicidal self-assessment.
And though the experience resulted in a baptism of media for Clarke, he can take comfort, says a senior retail source, that "there are a number of people within the business who are willing Clarkey on".
Clarke himself says: "Sometimes, tough decisions, like closing the final salary pension scheme, need to be made. But I hope I don't need to be guarded. The spirit in which business is done needs to change. Consumer trust has been damaged. Look at the banking crisis."
In another significant move, Clarke has spearheaded the acquisition of Netto, and he's "really excited by the growth of our [small format] supermarket business".
"We've got 27 stores already. And the key for us, over the last two years, has been to develop a format, with the recruitment of Karen Hubbard, that offers customers the same prices as our superstores. We can now grow this organically, but with Netto, that gives us instant growth. We would have liked fewer disposals. But we're very happy with what we've bought and the price we've paid. This was a property transaction, and you can't base the price on current sales: doubling the number of staff gives you an indication of the level of sales we expect."
Caution at Morrisons
The opportunities for Morrisons are also considerable, including online, non-food, international and convenience. As well as appointing headhunters for a new board-level strategy director role, at the half-year Philips outlined plans to introduce new trials in a number of areas. In a market looking for big ideas, Philips believes a cautious approach is well advised.
"I am passionate about experimentation. When we alight on a winning formula, we can really follow through. But we make £850m profit, and we change the model at our peril. We don't have the capacity to address all the opportunities at once."
Achieving like-for-like growth at the same time won't be easy, however. As one analyst put it, "Dalton has got to fly the plane and clean the windows."
And it won't help that the new store pipeline has dried up. As well as Asda's Netto acquisition, Tesco, Sainsbury's and Waitrose look well placed although Evolution Securities analyst Dave McCarthy argues the "space race" is "earnings dilutive".
Without an obvious route to easy top-line growth, and in a flat market, the operations experience of Philips may come in handy. Garry Froese, EVP of grocery at Loblaw, recounts the "stellar EBIT growth" that Philips achieved at Loblaw "on flat sales" by "paying close attention to the nitty gritty".
Philips has spent a great deal of time in the last seven months understanding the detail. Systems is one area of continuing weakness, he admits "We still buy some of our hardware on eBay. We've got a plan to upgrade our systems, but at the moment a lot of our processes are manual. The upside for range and productivity is incredible."
And Philips understands what makes a supermarket tick. "It's about store managers and buyers and everyone else plays a peripheral part. I've done both jobs, so I know how to tweak the levers."
One area of focus looks certain to be range and, in particular, own brand. While Bolland's tenure saw the launch of hundreds of new premium lines, the value range has been neglected, Philips admits, and he is looking to recruit a new board-level director for private label.
"We never touched the Value brand and the Morrisons brand so we're behind the curve. There's a lot to be done. But improving range, building private brand, freeing up space, reducing overlap, taking out 10% of the assortment, to free up 10% new range, that's another huge opportunity." And the team is working "furiously hard behind the scenes", says a colleague, "to catch up with improvements among rivals".
The other area of focus is clearly price. As we report this week, Morrisons has increased by 300% the number of buy-one-get-two-free deals on offer, following successful use of the mechanic in the run-up to last year's Christmas. But base prices are more competitive too, says Philips. "If you've spent time with Sir Ken, you'll know his business was built on being competitive. We will be."
At M&S, Bolland has also had his hands full, searching far and wide for an FD after Ian Dyson moved to Punch two days after the Dutchman pitched up. He hired another outsider Alan Stewart, who was working for an aircraft leasing company but who has a background at WH Smith and Thomas Cook as well as in banking. And Bolland has used the opportunity to change the reporting structure that bizarrely saw retail operations feeding into finance. It now reports direct to Bolland.
Nevertheless the promotion of Robert Swannell, a City banker, to non-executive chairman, gives M&S a distinctly blue-chip feel. And while that's no bad thing, says a former M&S exec, the lack of GM and womenswear retail experience will mean Bolland must rely on his trading triumvirate Kate Bostock (fashion), Jon Dixon (food) and Steve Sharp (marketing) to provide continuity. "I suspect he will be more dependent on Kate than the others," says another senior retail industry source.
Sharp will have no complaints in this regard, after working with Bolland to launch an early autumn ad campaign that brought in an extra 1.8 million customers. "We invested, it paid off," says Bolland.
Indeed, Bolland's record at Morrisons - where he retained the existing management team, while strengthening it with new board-level appointments in HR and marketing - suggests he knows how to get the best out of key execs. And also how to manage up.
The handover with Sir Stuart Rose is "going really well", adds a senior M&S colleague. "My sense is he will want to take what's good and build on it, but equally, Bolland will be keen to bring in people from outside", says Shipley. And a senior industry source believes he will also look to address the culture: "I think he will take some risks and encourage other people to take risks. He may want to look at overheads, too. It's a bureaucratic organisation and in retail, speed is of the essence."
And though Bolland's utterances to date have preached evolution over revolution, whatever you do, don't underestimate the scrutiny he is subjecting the business to. Analysts regularly refer to Bolland as a marketer, to his irritation. "Marketing is more visible, but I'm a very broad business person," he says. And the review will examine "supply, distribution, stores, range virtually everything".
Rank: CEO and president, Asda
Style: An officer and a gentleman,he leads from the front Military record: Clarke formerly of Fine Fare and Morrisons joined Asda's ranks in 1992. By 2000 he'd earned his stripes as retail director. After a posting as Matalan COO and Iceland MD and a spell as a consultant in the noughties, he rejoined Asda in 2008 and took command in May.
Last meal: Clarke hankers after his grandmother's steak & kidney pie and blackberry & apple crumble.
High Command: Rick Bendel (international chief marketing officer); Doug Gurr (executive development director); Simon King (COO); Chet Kuchinad (people director); Judith McKenna (CFO);Andrew Moore (executive MD, George); Charles Redfield (chief merchandising officer)
Rank: CEO, Morrisons
Style: Irish-born, energetic, youthful Military record: Has seen action in 14 countries, including New Zealand, Spain, Germany, Canada, Brazil and Germany. Secured the top spot at Morrisons in January.
Last meal: Sabado (a Spanish bean and chorizo stew) with a glass of Rioja. For pudding, his sister's crème brûlée.
High Command: Richard Pennycook (CFO);Mark Gunter (group retail director); Mark Harrison (store operations director); Richard Hodgson (group commercial director); Norman Pickavance (group HR director); Martyn Fletcher (group manufacturing director);Neal Austin (group logistics director); Martyn Jones (group corporate services director); Angus Maciver (group marketing director)
Rank: UK CEO, Tesco
HQ: Cheshunt, Herts
Style: Shrewd, analytical, dry
Military record: A Tesco lifer, Brasher joined the business in 1986 after brief spells at Unilever and RHM. Throughout the nineties he spearheaded Tesco's advances into convenience food and oversaw the development of Clubcard. By 2004 he'd made it on to the board as commercial and marketing director. He becomes CEO for UK and Ireland next year.
Last meal: Fresh porcini mushrooms washed down with a Brunello di Montalcino.
High Command: Carolyn Bradley (marketing dir.); Hayley Tatum (personnel director); Nigel Jones (operations director, distribution); Steve Garton (operations director, store ordering); Alison Horner (support office director); Claire Peters (ops director, Extras); David Woodfield (operations director, superstores, south);Tony Reed (ops director, superstores, north); Gerry Gray (ops director, Express); Andy Rowlinson (operations director, Metro); Mike Iddon (UK FD); Gordon Fryett (UK property director)
Rank: CEO, Marks & Spencer
Style: Bolland's got style in spades. A sharp dresser, well known for his charm, he was described as "such a smoothie" by Michael Buerk at this year's IGD Convention. And he wasn't even there at the time.
Military record: Dutch-born Bolland proved his mettle in brewing, working his way up to the position of COO at Heineken in 19 years. In 2006 he took over the role of CEO at Morrisons. In May he was named as Sir Stuart Rose's successor at M&S.
High Command: Sir Stuart Rose (chairman); Alan Stewart (CFO);Steven Sharp (executive director, marketing); Kate Bostock (executive director, general merchandise); John Dixon (executive director, food)
Rank: CEO, Tesco
HQ: Chesham, Herts
Style: Defintely a hands-on leader, Clarke has "the constitution of an ox" having tirelessly travelled the globe in his international role. Supports Liverpool.
Military record: Similarities with Sir Terry Leahy are remarkable. A Tesco lifer, born in Liverpool, Clarke worked part-time at his local Tesco while still at school in 1974, and joined the retailer's management training scheme after reading economics at Liverpool University. He's proved his mettle in a range of roles, including store managing, buying and marketing, and was instrumental in Tesco's success in Korea, Central Europe, Turkey, India and China. He also runs IT and logistics. Named as Sir Terry Leahy's successor in June.