Sunday 25 September 2016

Backing start-ups and giving back: Tony Keohane on life after running Tesco Ireland

After battling to hold its market share here through the crash, Tesco's former CEO is enjoying a new portfolio career, writes John Reynolds

Tony Keohane

Published 25/10/2015 | 02:30

Tony Keohane by Paul Young
Tony Keohane by Paul Young

According to the well-known slogan, 'every little helps' - and former Tesco Ireland boss Tony Keohane has been applying this idea to his working life.

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He's giving a little of his time to a variety of new roles and interests that will keep his diary full for the foreseeable future.

Describing the move as "a renewed focus, rather than a reinvention", he's backing a retail technology startup while also developing a keen interest in food startups too. There's more, such as roles with a charity and board seats with Bord Bia, Munster Rugby and Trinity College; consultancy work related to retail and food production, and an advisory role with the Department of Social Protection, where he's keen to help Intreo - formerly Fas - become more like a commercial recruitment firm.

Enough?

We're meeting in Dublin's Shelbourne Hotel where, fuelled by several Americano coffees, he expounds on his new roles and his previous one with Tesco, prior to which he worked for Quinnsworth and Woolworths, having started his career in retail in 1978.

For any readers unfamiliar with his role heading up the British giant's Irish business, against an onslaught of competition - not only from rivals Dunnes Stores and Super Valu (and Superquinn before their merger) but chiefly from German contenders Aldi and Lidl - despite growing the business from €2.7bn in sales in 2006 to just over €3bn in 2013, and from 111 stores to 142 - though Tesco's market share fluctuated at times, he more or less held the line as it improved slightly from 26pc to 26.8pc according to analysts Kantar Worldpanel's figures.

After stepping down as chief executive, he stayed on as chairman for a further two years, finally leaving the company in July of this year.

Did he take any downtime after that?

"My golf handicap improved for a few months - and there was plenty of room for improvement - but it has since slipped back again," he laughs.

"I took some time with the family. I spent a while considering the work offers coming in.

"There were some speculative offers right across the spectrum of business sectors, though I'd rather not elaborate on that. Others were more substantial. The roles I've chosen are from those, with a charity and a part of government, and then the commercial ones," explains the 61-year-old Corkman and father of three.

He's both an advisor to and investor in fellow Corkman Roy Horgan's MarketHub - a 'big data' retail analytics firm.

"It can be scaled and internationalised, and gives retailers data that they can act on - an insight into what shoppers are buying and how you can adapt your prices and product offering, depending on what competitors are doing. It can show them five things that worked, five things that didn't and then suggest five things to do to improve their sales. They'll see what promotions work and those that don't, the less obvious item combinations that people buy and the items that bring people into their shops. It should also help retailers reduce food waste.

"Retailers fear that in a deflationary market they won't have the growth over time that brought efficiencies, which in turn drove down prices that sustained that growth. Instead it's likely to come from differentiation, and technology like MarketHub's will play a key role, benefiting both shoppers and retailers," affirms the Carrigaline native and son of a housewife and father who worked for Irish Steel.

The keen sports fan, gym-goer and dog-walker is also staying true to his Rebel County roots through a seat on Munster Rugby's commercial board, helping them think up new ways to earn money.

"I jumped at the opportunity to do it. I'm married to a Leinster- supporting wife though, so when I watch them it's usually closer to home at the RDS."

He's also playing a similar role with Trinity College.

"None of us who bring experience from the commercial world have all the answers, but we can all do our little bit to shape things through a combined effort," he says.

Roles with Inner City Enterprise (a Dublin charity that has helped 200 previously unemployed people start their own businesses over the past year) and on the Labour Market Council (where he's keen for Intreo to evolve into working more like a commercial recruitment firm) are ones where he is keen to make a difference too.

"I'm passionate about employers looking at unemployed people as an opportunity. There are good examples of Intreo working in the way we intend in countries like Germany," he enthuses.

Through his consulting work he also hopes to work with food start-ups, and it's an area that may also be relevant to another board seat he's accepted with Bord Bia.

He also gets an insight into a different side of the food business through an advisory role with Malone Engineering, which manufactures food production equipment.

"I enjoy helping small producers and people in small businesses develop into bigger ones. I'm interested in food, its provenance and food producers and their products," he continues, adding: "I'd like to be a better cook too - though I'm not sure I'd ever make the grade in my house; my wife and kids are real foodies. I have more time for cooking now though, and I'd be a healthier eater than perhaps I used to be.

Keohane sees himself more of a business builder than an entrepreneur, but it hasn't stopped him setting up his own consulting business while also working on retail-related projects with Derek Hughes, the founder of the now defunct Hughes & Hughes newsagent and bookshop chain, and whose clients include quirky Danish retailer Tiger and the Tayto theme park.

"We're working together at 180 [their quirkily-named firm] on a number of new projects, and we aim to become Ireland's go-to retail consultancy. At the moment a lot of firms look to consultants in the UK or elsewhere for this."

Work that the firm has done for a group of businesses in Dun Laoghaire in south Co Dublin, looking at the town's strengths, its population and how it might reinvent itself to become a town of shops and attractions that people want to visit is indicative of the kind of thinking other Irish towns need to adopt, Keohane maintains.

"Transport access and parking needs to be good. You need a range of shops and services. Towns need to be somewhere you want to go because something is happening there that people enjoy, in retail or entertainment."

Critics such as RGData, which represents independent shops argue that the 'Tesco-isation' of towns, where supermarkets tend to draw people away from main streets and perhaps work against that aim, I point out. Though of course he no longer speaks for the supermarket, he counters that it was vital for competition in towns.

"If you look at the market shares, no one supermarket dominates, so you might say the system worked," he adds.

How retailers and their suppliers - large and smaller food producers - collaborate will determine how we shop in the future, he says.

"Technology like MarketHub's will play a part of course. Shoppers should benefit."

With more of us shopping in Aldi and Lidl these days, often shopping in several stores for specific items in each, has he changed the way he shops at all?

"I'm a life-long Tesco shopper. I'm still a fan though I'm no longer in the business. No-one else lured me away," he laughs.

However, those German rivals ate a big part of his lunch while he was at Tesco's helm, especially after the economic crash in 2008.

I ask if the company took enough notice of this - particularly if not only store sales, but also the trends mapped by supposedly ultra-smart Clubcard division Dunnhumby (the sale of which was curiously scrapped by the UK headquarters earlier this month), must have emphasised it?

"Retailers are always first in and last out of a recession, but we thought we'd get out of it very quickly. We looked at it as being serious, but not long-term. Perhaps the company was both distracted and consoled by that. But you're right in that the evidence was probably there.

"You still have to interpret what you're seeing and ask whether it's permanent and significant - which it was.

"Did we realise what we were seeing and did we respond quickly enough? The answer would be no, because we thought it was a V-shaped recession."

In an article on Tesco's UK business, the lofty Harvard Business Review last October referred to the point about sales data and Dunnhumby, concluding that "knowledge went from power to impotence." Sweeping price cuts in 2009, albeit in response to cross-border shopping did little to stem the tide.

"We were actively looking at our range of products. Ultimately it's easier sometimes to shop in stores where there's a narrower range," Keohane counters.

Critics say that whereas Aldi and Lidl's own labels are marketed to emphasise quality in terms of value, appealing particularly to middle-class shoppers, Tesco's own brand items are marketed more bluntly, emphasising price in terms of value, so are less appealing.

In this context, holding the line on market share along with his other achievements were no easy feat for Keohane.

"I'm comfortably busy now, but it's nothing compared to the degree of pressure when I was CEO. I thoroughly enjoyed it - to do the job you'd have to. But from my later perspective as chairman, I certainly appreciated the sheer pressure the executive team were under all the more.

"I also thoroughly enjoyed the variety and challenges of retail, developing teams, selecting people to form a dynamic team who challenge each other and work together. That's both your biggest responsibility as a CEO. It's also the most rewarding thing if you get it right, because then your strategy gets implemented.

"I'm particularly proud of the link we built for Irish producers to export what is now more than €900m of their food and drink every year to Tesco's UK and other businesses."

Though his diary is now full of interesting new challenges, does he miss the role at all?

"It's a real Cork answer - but I do and I don't," he laughs, likening the pressure to that when standing over a putt on the 18th that would win or lose the day.

"Sometimes I wish I was there in the middle of some challenge in the business, but I absolutely enjoy what I'm doing now. Some people will always know me as 'Tesco Tony though,'" he adds with a smile.

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