Tesco chief executive Dave Lewis is set to step down from the grocer next year as the business delivers half-year profit growth and flat sales.
The grocery titan, which recorded a 6.7% uplift in pre-tax profit to £494m in the 26 weeks to August 24 on flat group sales of £28.3bn, has unveiled that current boss Lewis will be succeeded by current Walgreens Boots Alliance chief commercial officer Ken Murphy when he steps down next year.
Chair John Allan said: “It is with regret that I have accepted the resignation of Dave Lewis as group CEO of Tesco, who has decided that he wants to leave the business in the summer of 2020.
“Dave has done an outstanding job in rebuilding Tesco since 2014 and he continues to have unwavering support from the board. Some time ago, however, he indicated to me that he was considering the best time to hand over to a successor. His openness allowed me to begin a thorough and orderly process to identify a potential candidate to replace him. As a result, today, we have appointed Ken Murphy to succeed Dave as group CEO of Tesco next summer.”
Allan added that he “firmly believed” Murphy was the right person to succeed Lewis due to his “deep commercial, marketing and brand experience within retail and wholesale businesses” at both Alliance Unichem and Boots.
Tesco results
Lewis’ slated departure comes as the retailer unveiled that its 25.4% uplift in group operating profit before exceptional items to £1.4bn was “driven by space right-sizing, cost savings and improved product mix”, with a 28.4% uplift across the UK and ROI to £1.1bn.
Tesco’s UK and ROI sales were broadly flat year on year at £22.4bn, while sales across Central Europe and Asia fell 7% to £2.8bn and rose 8.4% to £2.6bn respectively.
The grocer plans to open 150 new Express convenience stores aross the UK and ROI over the next three years, alongside three new discount format Jack’s stores by next February.
Lewis said: “My decision to step down as group CEO is a personal one. I believe that the tenure of the CEO should be a finite one and that now is the right time to pass the baton. Our turnaround is complete, we have delivered all the metrics we set for ourselves. The leadership team is very strong, our strategy is clear and it is delivering.
“With these firm foundations and a competitive, sustainable growth strategy in place, I have no doubt that Tesco will kick on again under new leadership next year.
“When that time comes, I will watch progress from outside with interest, deep affection and pride. In the meantime, you can be sure that I will give the job everything I have until my very last day.”
Allan added: “Today’s results confirm that the Tesco turnaround has been delivered.
“Under Dave’s leadership, Tesco has transformed customer satisfaction and rebuilt the business. We can now move forward with renewed confidence. We have an exceptional leadership team, a very clear strategy, a reinvigorated brand and financial strength.”
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