Tesco CEO Dave Lewis has announced he is stepping down after five years at the helm of the supermarket giant.
Chairman John Allan said he had accepted Lewis’s surprise resignation with “regret”.
Lewis’s departure comes as the chain reported a 6.7% rise in first-half profits for 2019 to £494m, says the BBC
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Known as “Drastic Dave”, Lewis was hired as CEO in 2014 to turn around the faltering supermarket’s fortunes, says The Telegraph.
“Put quite simply he is the bloke that saved Tesco,” said Shore Capital analyst Clive Black, reports Yahoo.–––––––––––––––––––––––––––––––For a round-up of the most important business stories and tips for the week’s best shares - try The Week magazine. Get your first six issues free–––––––––––––––––––––––––––––––
Why has he resigned?
Lewis said his decision to step down was a “personal one”. He added: “I believe the tenure of a chief executive should be a finite one and that now is the right time to pass the baton. The turnaround is complete, we have delivered all the metrics we set ourselves.”
The BBC’s business correspondent Dominic O’Connell said: “As with comedy, timing is everything in big business… Dave Lewis is clever enough to know that it’s best to leave while the going is good.”
O’Connell added that there will now be speculation that Lewis will return to Unilever, the consumer goods giant he left to join Tesco in 2014.
Why is it a shock?
Bruno Monteyne, an analyst at Bernstein, told the BBC that there had been speculation about Lewis’s future after Tesco’s takeover of Booker, the biggest UK food wholesaler, in 2017. Booker’s CEO Charles Wilson joined the Tesco board during the merger.
But “we're all trying to grapple exactly about the timing right now”, said Monteyne. Lewis’s departure was a “total surprise”, he added.
What next for Tesco?
Lewis will leave the supermarket in the summer of 2020. Tesco chairman John Allan said: “Some time ago, [Lewis] 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.”
Lewis will be replaced next year by Ken Murphy, who has held numerous senior positions at Walgreens Boots Alliance, the owner of Boots chemists.
Murphy will receive a salary of £1.35m before bonuses. His joining date has not yet been confirmed.
