As Sir Terry Leahy prepares to leave Tesco, he reflects on a career that turned an unfashionable home-grown supermarket chain into a global retail juggernaut and made him Britain's most celebrated business leader

Despite being one of the UK's biggest companies, it's not easy to find the Tesco head office. Located in a nondescript industrial estate in a Hertfordshire backwater, I took a wrong turn and ended up on the edge of the Lee Valley Park. It was quite scenic—if you don't mind the pylons—but hardly the cutting edge of retail. Once I found the building, it wasn't much better. It's the sort of underwhelming low-rise you might expect from a suburban insurance firm—not the towering glass-walled edifice from which you'd expect global domination to be planned.

Meanwhile up in the chief executive's office, the impression is the same. Anyone who thinks Tesco is a faceless corporate intent on inflicting evil on the world should spend a day here. With its doughty wooden furniture and ancient TV, Sir Terry Leahy's office is hardly the lair of a 21st century global megalomaniac. There is nothing remotely self-aggrandising about the room. Leahy sits himself at the end of a board table and quizzes me on the magazine. Well briefed (he quotes the most recent circulation figure), he is ready for interview. As he approaches the end of a long, successful career with Tesco, he must be in reflective mood.

"The truth is this is not particularly a period of reflection for me," he says. "I understand why people might see it that way but I have never looked back, only forward. You probably find the companies with the best archives have got the worst future."

And that, in a nutshell, is Leahy. Without being flash, he delivers a neat one-paragraph summary of his message. There are few verbal flourishes but the occasional quip. "If they rise in the first place, all companies fall," he adds. "You've got to be realistic about that. You just want the time between when it rises and when it falls to be as long as possible. In the same way you don't want to be the last pope, you don't want to be the last CEO of a company. Success is about handing over a better company than the one you inherited. People who have grander or more specific visions sometimes cause problems for themselves. That was my aim-don't be the last CEO and try and hand over a better business than the one you find."

The business he "found" was already on the up. Started in 1919 by East End boy Sir Jack Cohen, 60 years later when then plain Terry Leahy joined Tesco's marketing department, the company had been in the doldrums under the management of Sir Jack's sons-in-law. But a revival had begun under Ian (now Lord) MacLaurin, who had, to quote Leahy, set the firm on "the long road back".

The lineage back to its founder is a key part of Tesco's story. The stability that comes from only having had five leaders (six including Leahy's successor) in 90-odd years is, he claims, key to its success. "You can find elements in Tesco today that Jack Cohen would recognise," he says. "At its heart is the idea that everyone is welcome. It doesn't matter what your academic achievements or background are. You can start anywhere and get on. All you need to do is demonstrate more energy and more initiative than the person alongside you."

Building on and cementing the culture was one of Leahy's aims when he took over. "There were two things I wanted to achieve. One was to find growth—which included the UK and overseas and in other markets like banking and insurance—but the other was about instilling values in the business that would sustain it and make it a place where young people wanted to step forward and lead."

Of the two, growth was, he says, the lesser imperative. Cultural values are the qualities that sustain a business. "We've made progress on both fronts. We do have a good strategy for growth but importantly we have a good culture where people like the company and what it stands for, feel well respected and feel, if they step forward, they will be given a chance."

Andrew Seth, co-author of The Grocers: The rise and rise of the supermarket chains, says that Leahy's arrival marked a step-change in the growth of Tesco. "When Sir Terry assumed the CEO role the company was market leader. But his arrival signalled the immediate pressing of the accelerator. Since then the pace of growth and the range of achievements have been remarkable."

The view in the City and the media is similarly positive. Neil Saunders, analyst at Verdict Research, says the typical view of Leahy's tenure as chief executive is upbeat. "If you look at where the company was when he took it on and where it is now, there's only one sensible view of it and that is overwhelmingly positive."

But the media hasn't always run with the story of Tesco as a loving, happy family. Having fallen out with the press in the past—and sued the Guardian for an article making allegations of tax avoidance—Leahy is now sanguine about the criticism. This is partly because the criticism has dropped off since the recession.

"With the recession and the problems in banking, people see Tesco in perspective," he says. "They feel that it is good to have a successful company, whereas they were taking that success for granted."

Tim Danaher, editor of Retail Week, agrees there has been a change in perception. "Since the recession there has been a shift in public trust. Consumers have lost trust in institutions like the banks and they're looking at big retailers as institutions they can trust. This allows Tesco and others to offer law and banking services," he says.

Danaher echoes Leahy's view that the criticism came from a "vocal minority" and that a degree of negative feedback was inevitable. "Tesco has always gone to great lengths to keep local communities onboard. But if you are as successful and expanding as quickly as Tesco has been, you are always going to ruffle feathers."

One of those whose feathers were ruffled is William Chase, the founder of Tyrrells Crisps and Chase Vodka. "Sir Terry is an extremely aggressive player," he says. "It was great for Tesco, but impossible for suppliers. It pays suppliers as little as possible."

As to more personal criticisms—he has been called "The Mugabe of retail" and "the Godfather of binge drinking"—Leahy is even more blunt. "I ignore these comments. Overall, I think the press has been pretty positive about Tesco and my role. Tesco is a big, high-profile business and it did make good copy to knock us for a while. It's part of the game."

But there remain contradictions in the business. Firstly, for such a famously low-profile leader, Leahy exercises a firm grip on the company. But he sees no discrepancy. "People respond if they know that you know where you are going. But you don't need to be noisy about it. The more certain you are about where you are going the less you have to shout. It is important in a big organisation to be relatively quiet at the centre."

And yet the organisation is widely seen as a reflection of Leahy, so how sustainable is the culture without him? "The business does reflect Sir Terry's personality," explains Danaher. "His humble origins are evident in the openness of the culture. By creating the Finest and the Value ranges, he sent a message that everyone is welcome. This is a fantastically strong business and if you look around the boardroom Sir Terry has created a very stable board. It will be business as usual when he goes."

Central to Leahy's reputation has been his ability to take Tesco global. He is proud of the firm's recent advances abroad. "We've developed a successful international business. We are the only major British retailer to do that and one of a few in the world."

The only blemish to date is the firm's US operation, under the Fresh & Easy brand. Despite negative US press, Leahy has no regrets. "I believe we have got it right in the US. We followed the same principles of being flexible in our approach, tailoring the offer to the local market, using skills rather than scale and picking a niche of small stores. We used the skills we have around supply chain, own brand, and ready meals and fresh food. All the building blocks are there that we've used successfully elsewhere."

Others are less upbeat. "It is too early to tell about the success or failure of the US operation," says Danaher. "There are signs that things are improving. One surprise about the timing of Sir Terry's departure was that Fresh & Easy hasn't had a chance to prove itself. But the fact that the company has made a statement that they expect profits by 2013 suggests there is more to it than bravado."

Saunders adds that the US launch has cost more and grown more slowly than anticipated. But he says the company is there for the long term. "Sir Terry would have hoped for it to be profitable and larger by now. But the recession has meant that shoppers have stuck to entrenched patterns. Now the outlook is better and more robust. But why should it be about short-term profits? Retail doesn't work like that."

Saunders says that it was brave to launch and grow a brand organically rather than buy an existing brand. This willingness to have a go at something new is typical of Leahy's approach to innovation. His tenure has been characterised by a list of innovations. The one that cemented his reputation was the Clubcard loyalty scheme. As he says: "Clubcard has helped sales, but more importantly it's given us a way of working with customers to build the trust and loyalty that are the underpinnings of a brand."

Danaher agrees that Clubcard has been pivotal. "Sir Terry laid the foundations for his success with the Clubcard scheme. It is now nearly 16 years old and yet not many UK retailers come close to matching it. Boots is about the only one that gets near it."

Saunders believes the importance of Clubcard is not so much what it did for customers but what it achieved for the company. "It put Tesco in a position of knowing more about what the market was thinking than anyone. That allowed it to make other strategic decisions based on what it knew about its customers. And it allowed Sir Terry to pursue his obsessive focus on customers and informed innovations in services and store formats. It was Sir Terry's vision to spot the need for format flexibility. He was the first to understand that there were limits to growth from the traditional supermarkets and that the one-size-fits-all approach wouldn't create the growth he was after. His vision with Express was to allow Tesco into local markets that until then had been serviced by low-quality, high-price independent convenience stores."

As he prepares to step down, Leahy is keen to stress that decisions have been collective. "My philosophy is to start the business with customers, understand what's important in their lives and to meet those needs. That's what spawns innovation. It's a natural process. The whole business builds itself around the customers, and that includes me. Tesco is well regarded as a business that thinks carefully about things. We research and we don't rush into things."

In what appears to have been the perfect succession process, Leahy and the board opted for a fellow Tesco "lifer" in Philip Clarke to succeed him. There's every chance the story will continue along the same lines for some time after Leahy's departure.