TESCO

Tesco boss Dave Lewis in shock departure

The supermarket chain said it had accepted the chief executive's resignation with 'regret'

In Summary

• Lewis said the decision was a "personal one", and Tesco chairman John Allan said he had accepted the resignation with "regret".

• He took the helm at a tumultuous time for the supermarket group, announcing shortly after he took over in 2014 that the retailer had been overstating its profits.

Image: REUTERS

Tesco has announced that its chief executive Dave Lewis is stepping down after five years in the role.

Lewis said the decision was a "personal one", and Tesco chairman John Allan said he had accepted the resignation with "regret".

He will be replaced next year by Ken Murphy, who has held senior positions at the owner of chemist chain Boots.

The departure was announced as Tesco reported a 6.7% rise in first-half profits to £494m.

Lewis said: "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."

Analysts at Shore Capital said Lewis was "quite simply he is the bloke that saved Tesco".

He took the helm at a tumultuous time for the supermarket group, announcing shortly after he took over in 2014 that the retailer had been overstating its profits.

The company subsequently revealed a loss of £6.4bn, the biggest-ever suffered by a UK retailer

Since then Lewis has set about reducing costs, with the latest of round job cuts announced in August when it said 4,500 staff in 153 Tesco Metro stores would lose their roles.

He also took on the discounters Aldi and Lidl by opening Jacks, Tesco's own discount chain.

'Total surprise'

Lewis also orchestrated Tesco's 2017 takeover of Booker, the biggest food wholesaler, in a £3.7bn deal to create the "UK's leading food business".

He now intends to leave "in the summer of 2020" according to the chairman.

Bernstein analyst Bruno Monteyne told BBC Radio 4's Today programme that there had been speculation about Lewis' future after that deal as Booker's chief executive Charles Wilson has joined at the time.

"We're all trying to grapple exactly about the timing right now," said Lewis had joined five years ago "at a very difficult moment" for Tesco,  Monteyne said.

"Not only had it lost the trust of the customers, losing material market to the discounters, it ended up with an accounting fraud... internal morale broken. He really took over a broken company, and from being the most profitable retailer in Europe, suddenly had losses for the first time ever."