Tesco chief executive Dave Lewis steps down in surprise departure

The chief executive of Tesco, Dave Lewis, will step down next year in an unexpected decision he described as “personal”.

Mr Lewis has been at the helm since 2014, leading a turnaround of the supermarket chain by cutting prices, slashing thousands of jobs and simplifying the range of products.   

“We have now delivered every element of the turnaround plan,” Mr Lewis said in a statement on Wednesday. “With the turnaround complete and as we begin to implement the next steps of our sustainable growth strategy, now is the right time to plan a smooth and orderly succession. As such, I will step down as group CEO next summer.”

Ken Murphy has been appointed as his successor. Mr Murphy has spent his career at health and beauty retailer Boots.

Tesco chairman John Allan said Mr Lewis told him “some time ago” 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,” Mr Allan said.

Also on Wednesday, Britain’s largest retailer said sales in the first half of its financial year dropped 0.4 per cent. Tesco attributed most of the decline to subdued market growth in the UK and Ireland, especially in recent months, and to an unfavourable comparison with a year ago when sales were boosted by hot weather, the World Cup and the Royal Wedding.

However, profits still rose strongly.

“This is largely due to cost-cutting,” said Neil Wilson, chief market analyst for Markets.com.

“But it’s a big blow for Tesco to lose Lewis … It’s hard to underestimate the impact Lewis has had on Tesco, as he turned the supertanker around after a run of poor results and an accounting scandal.

“Ken Murphy has solid pedigree, coming from Walgreens Boots Alliance, a retailer that understands cost-cutting. He’ll need to employ these skills at Tesco where he’ll have to contend with tougher organic comparisons post the Lewis era. Moreover, the battle with the discounters is only just starting.”

Low-price supermarkets Aldi and Lidl are rapidly attracting new shoppers throughout the UK, threatening Tesco’s dominance of the grocery market.