Is the consumer-to-retail hiring pattern growing in importance?

Arguably the two most high-profile retail appointments of the year so far have been made in the last couple of weeks. Tesco and Target both replaced CEOs who had fallen short in some way, having searched for individuals who were able to shake up their structures and culture. It was still a surprise, though, to see two executives from FMCG businesses brought in to the businesses. Tesco appointed Dave Lewis, of course, while Brian Cornell of PepsiCo is to replace Gregg Steinhafel at Target. The two coming in such close proximity makes me think that there might be something more in this. Do these two hires point to a wider trend, with consumer businesses beginning to provide the next generation of retail leaders?

It is clear that Tesco and Target are in need of a revamp. Both companies have performed sluggishly in the stock market over the last couple of years, with international expansion (Tesco with Fresh & Easy in the US and Target going into Canada) weighing on their balance sheets. They are also fighting off competition from established rivals and newer players. As such, the two boards have decided that an injection of fresh thinking is what is needed. I would argue that Brian and Dave’s branding knowledge and top-notch sales abilities will be extremely useful qualities in the battles ahead.

With these hires, Tesco and Target are also emphasising the need to reinvent themselves. Tesco, particularly, have shown that they are aware of this: Dave is set to be Tesco’s first ever CEO brought in from outside the business. Brian has more retail experience, having served time at companies like Safeway and Wal-Mart in the past, but he was very important to PepsiCo by the end of his time there – indeed, he was seen as a potential candidate to eventually succeed Indra Nooyi. Hiring in from outside the retail space demonstrates to the media, to investors and to employees that maintaining things as they are will not be acceptable.

The crossover from FMCG to retail is not always completely rosy: Marc Bolland has experienced a tricky time at Marks & Spencer since he took over, for instance. However, the marketing and supply expertise that comes with working around global consumer goods brands is sure to be prized in a retail setting. Hard retailing issues like ecommerce are more difficult areas, though. One company who has focused on retail when making a crucial hire is Morrisons, who announced the appointment of Andrew Higginson as chairman last week. There are clearly different ways to go about building a retail board – Andrew will bring outstanding sector experience and good online credibility. Having said this, the boldness of Tesco and Target is likely to see a boost in enthusiasm, among staff and shareholders alike.

It’s clear that FMCG executives have many desirable qualities to retailers. Can we expect to see this hiring pattern continue in the longer term? Let me know at, and have a wonderful weekend!