Embattled supermarket giant Tesco ended its four-month hunt for a new chairman last night by appointing John Allan to the role. Here is what the analysts said.

John Allan has been appointed chairman of Tesco

“We would have preferred Archie Norman over the 66-year-old John Allan, as Allan is seen as more of a logistics expert rather than a food retailer, given his Fine Fare days (1977 to 1985) were 35 years ago. John Allan as chairman of Dixons and deputy chairman of the merged Dixons Carphone group has some electricals experience, which is a category largely de-emphasised at Tesco with the wholesale move of in-store non-food to online.

Tesco, despite the halving of its market value and shrinking of its group trading profit to less than £1.4bn, still seems willing to pay substantial fees - £56,000 per month for senior executives. I am not so sure that Tesco has lowered its sights or that investors have understood that this is a not typical turnaround story as Tesco is already one of the most efficient food retailers in the world (running its store too ‘hot’), but mis-managed the timing of its supplier funding to offset its falling brand equity, falling sales densities, loss of pricing leadership and poor return on International investments. All these factors can be stabilised, but probably do not require a major operational investment strategy, but more of a cost cutting exercise and divestment of non-performing assets, in our view. The question now is whether the ‘clean’ Tesco UK operations actually make double digit cash returns or can that only be achieved after a substantial asset write down.” Mike Dennis, Cantor

“Tesco has announced the appointment of John Allan as its new Chairman. Mr. Allan takes over on the 1st March 2015, when incumbent chair, Sir Richard Broadbent, will stand down. The appointment of a new Chairman by a capable independent grouping is another job completed in the repair of Tesco in our view, albeit for Mr. Allan‎ the job has just begun. In truth we know relatively little about him. That said he has had a distinguished career to date, largely in logistics‎, including CEO of Exel plc. Mr. Allan also has experience of retail though, both grocery and non-food, formerly with Fine Fare, now there’s a blast from the past, and more latterly with Dixons, prior to its merger with Carphone Warehouse. The turnaround in the performance and prospects of Dixons has been a remarkable achievement by its collective management, culminating in a well regarded merger. Mr. Allan’s turnaround experience may be highly valuable to Tesco and whilst not necessarily the centre of his time, he may have beneficial insights into logistics progress too.

Mr. Allan’s appointment may raise an eyebrow or two with respect to who else was not appointed to the role of Chairman. Sir Ian Cheshire of Kingfisher fame seemingly ruled himself out of contention  some weeks ago but recent financial press speculation has centred the possibility of Archie Norman taking up the role of Tesco Chairman; Mr. Norman needs no introduction to any seasoned supermarket watcher following his ‘duet’ with Allan Leighton in the 1990s. We cannot second guess whether Mr. Norman was in serious contention or not and frankly now it does not matter. However, from our perspective we could foresee a ‘dream-ticket’ scenario of Messrs Norman and Lewis working together, one that we sense the market would have warmly welcomed, but this is not to be. So with another box ticked off the company’s  lengthy ‘to do’ list Tesco continues to make steps forward with its recovery, although how many more baked beans and loaves a new Chair will add to the tills is a debating matter.” Clive Black, Shore Capital

“John Allan’s time at the defunct supermarket chain Fine Fare in the 1980’s doesn’t make him a retail heavyweight like Archie Norman, but he seems to be a shrewd operator and knows his way around the boardroom, given his considerable experience, so he should be a safe pair of hands as chairman of Tesco.” Nick Bubb, independent analyst

Tesco hires John Allan as chairman to replace Richard Broadbent