Tesco CEO Philip Clarke in 2013

Sir: Wednesday 4 June 2014 can go down as Tesco’s very own Black Wednesday (’Tesco blames store refresh plan for dragging down Q1 sales,’ thegrocer.co.uk).

With the appalling numbers announced this week, it’s now crystal clear that Philip Clarke’s turnaround plan is not working. Or if it is working, then it’s not working anywhere near quickly enough.

It seems to me that Tesco cannot see the wood for the trees. It is revamping its stores with posh bakeries and Giraffe restaurants when it needs to be looking at the deeper structural changes in the industry.

Tesco’s market share is being destroyed by Aldi and Lidl, and by Waitrose and M&S. On top of this, the hypermarket model is fast becoming redundant.

Clarke needs to reconstruct Tesco in the brave new world of lower profits, lower market share and an internet-enabled shopper. His only option is to get out the big bazooka and blow the competition away. £200m in cuts is nothing when Asda and Morrisons are both returning £1bn to customers. He needs to halve his industry-leading margin of 5% and put it into price cuts, take the axe to capex and reduce overheads.

John Ibbotson, director, Retail Vision