Tesco’s hat-trick of revelations ahead of the imminent completion of its £3.7bn Booker acquisition was greeted with a surprisingly subdued response from the market.

The grocer’s installation of Booker chief executive Charles Wilson – a man referred to by some in the industry by the moniker “two brains” – as boss of its UK and Ireland business would no doubt have been warmly received in the City.

Similarly, Tesco will have pleased investors by predicting that full-year operating profit would hit “at least” £1.57bn, slightly ahead of analysts’ expectations, resulting in a proposed final dividend of 2p per share.

Yet, when Wilson assumes his new role next month, Tesco’s current UK and Ireland supremo, Matt Davies, will exit the supermarket giant after a three-year stint.

Tesco shares

Former Pets at Home and Halfords boss Davies’ impact on the business in that time cannot be underestimated – a positive influence that perhaps goes some way to explaining the muted Monday morning movement in the share price of Britain’s biggest retailer.

After an initial uplift from 200.8p to 201.8p in the first hour of trading, Tesco’s stock dipped back to 198.2p by early afternoon, down 1% from its opening price.

“Perhaps Wilson’s own man management abilities have been downplayed amid talk of the much-vaunted strategic nous he brings to Tesco”

Wilson’s business flair may be widely accepted and respected, but there is no doubting that he has large and very different shoes to fill.

Davies’ people-centric approach and likeability among shopfloor teams has been a key driver of Tesco’s turnaround to date.

His focus on empowering store teams, listening to their feedback and improving customer service has gleaned results in the form of improving NPS scores – a metric group boss Dave Lewis has regularly articulated at results briefings as evidence that it is rebuilding trust among the British consumer.

As Shore Capital head of research Clive Black concludes: “While Mr Wilson is a class act for sure, we are disappointed that the talented Mr Davies will not be around as a serious piece of human capital for longer within the group.”

But perhaps Wilson’s own man management abilities have been downplayed amid talk of the much-vaunted strategic nous he brings to Tesco.

Wilson’s task

It would be easy to suggest that Wilson will likely bring a slightly more detached, strategic mindset to the position than Davies, which, to some extent, may be true.

Yet colleagues past and present have lauded Wilson’s abilities as a team leader to engage store managers – a trait that will be central to his new role.

Davies has laid firm foundations for Wilson to build on by overseeing vast improvements in customer service, ranging and availability, but there is more room for progression if Tesco’s stores are to completely fire on all cylinders once again.

“If the talented Mr Wilson can engineer a solid onward growth story for Tesco UK and Ireland, then the scope for further rating expansion may grow”

Clive Black, Shore Capital

Wilson will now be charged with achieving exactly that, while integrating the Booker business into the improving UK and Irish arm, and pursuing further opportunities to establish synergies and revenue growth.

With an anticipated full-year group margin of 2.8% demonstrating that Tesco is on track to achieve its target of 3.5% to 4% by 2020 independently of any Booker impact, Black highlights a “notable upside potential” to the stock.

“There remains time for investors to build a position to our minds, albeit we continue to see a case for a growing share price as the realisation of FY2020 earnings comes more clearly into focus,” Black suggests, reiterating Shore Capital’s ‘buy’ rating.

“If the talented Mr Wilson can engineer a solid onward growth story for Tesco UK and Ireland, then the scope for further rating expansion may grow.”

If former Marks & Spencer and Arcadia executive Wilson’s track record is anything to go by, the City should be confident that he can cook up such a recipe for success.