Tesco online boss to temporarily replace MD after it emerges company overstated profit

Tesco’s multichannel director Robin Terrell is to become interim UK managing director after it emerged the company overstated its profits by £250m.

tesco 2014 460
Robin Terrell has become interim UK managing director of Tesco, after it emerged the retailer had overstated £250m in profit.

Chris Bush, current UK managing director, is understood to be one of four executives suspended following the discovery of the error, which was uncovered as the supermarket prepared for its interim results.

In a statement, Tesco said the error was largely due to “the accelerated recognition of commercial income and delayed accrual of costs” – or, in other words, billing commercial income in the wrong time period.

The Tesco board has appointed Deloitte to undertake an independent investigation into the issue, which looks to have taken place in the first half of this year. The company’s current auditors, employed at the time the error took place, are PwC.

Tesco says it will provide a further update at its next interim results, which have now been postponed until 23 October. The results were due to be reported on 1 October.

The error provides a further headache for group CEO Dave Lewis, who joined just three weeks ago with the task of turning around the embattled retailer.

Shares in Tesco had already reached an 11-year low in August when the company cut its full-year profit forecast from £2.8bn to £2.4bn. Tesco’s share price was down 8.6 per cent to 209.90p at the time of writing.

Lewis said in a statement: “We have uncovered a serious issue and have responded accordingly.  The chairman and I have acted quickly to establish a comprehensive independent investigation.  The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”

Chairman Richard Broadbent said on a call with media this morning that he will not resign as he looks to lead the company through its latest crisis.

Neil Saunders, managing director of retail consultancy Conlumino, says: “Today’s announcement will further undermine market confidence in a company that has already lost a lot of investor goodwill. Mistakes do happen, but this gives the impression of a company that is not in full control of its internal procedures. It is just not what you expect from a company as large as Tesco.”

The announcement also indicates that Tesco’s financial performance was much weaker than anticipated, which Saunders says will alarm investors as it has now emerged the company has much further to travel to recovery than first thought.

“It is now more imperative than ever that Tesco outline a very clear and compelling strategy as to how it intends to put is UK business back on track,” Saunders adds.

Terrell, a former executive director at House of Fraser, joined Tesco in 2013 to lead its multichannel efforts. He has also held roles as managing director of John Lewis direct, chief operating officer of Figleaves.com and vice president and managing director at Amazon.co.uk.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here