Tesco CEO Dave Lewis steps down, saying turnaround ‘is complete’

Tesco CEO’s surprise departure comes as the company looks to shift from brand turnaround to growth under new leadership.

TescoTesco CEO Dave Lewis is stepping down, saying the “time is right to leave” because the company’s turnaround is complete.

Lewis will be succeeded by Walgreens Boots’ chief commercial officer Ken Murphy when he departs next summer. He describes the decision to leave as a “personal one”, saying 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,” says Lewis.

“The Tesco brand is stronger and customer satisfaction is the highest it has been for many years. Colleagues are doing an extraordinary job and their expertise shows in every store and channel every day. With these firm foundations and a competitive, sustainable growth strategy in place, I have no doubt Tesco will kick on again under new leadership next year.”

Lewis joined Tesco five years ago from Unilever as the company was embroiled in an accounting scandal that led to it posting one of the biggest ever corporate losses in the UK and perceptions of the brand tumbling.

An experienced marketer, he has led a turnaround focused on cutting costs and getting the basics right. That has involved improving availability, overhauling own-brand ranges and improving brand measures and customer satisfaction.

Speaking on a press call this morning (2 October), Lewis claims this focus on rebuilding the brand has paid off, with Tesco the only supermarket to increase NPS while its competitors’ scores decline.

We have now delivered every element of the turnaround plan and from this position of strength, the transformation of our business continues at pace.

Dave Lewis, Tesco

“We said we would rebuild the relationship between the brand and customers. You will see that in every measure of customer satisfaction we do that,” he said.

He has also made some big changes, including acquiring the Booker business, and taking on the German discounters Aldi and Lidl with the launch of its Jack’s chain.

How Tesco’s £3.7bn Booker deal will impact its brand

“What you see today is we’re now at a place where we can invest strategically and selectively in growth opportunities and get ourselves really competitive again. The business is healthy, vibrant and there is a lot of optimism about what we can do going forward,” Lewis added.

Tesco chairman John Allen says he accepted Lewis’s resignation “with regret”, adding that he has done an “outstanding job rebuilding Tesco”.

He says: “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.”

Tesco’s results

Lewis’s departure comes as Tesco posts interim results for the first half showing that operating profit increased 12.6% to £1.13bn, while profit before tax was up 6.7% to £494m.

Revenue was almost flat, rising 0.1% to £31.9bn. Like-for-like sales in its UK and Ireland business were also up 0.1% to £22.4bn.

“Despite challenging external conditions we have delivered a very good start to the year,” explains Lewis. “I’m very pleased to say that we have now delivered every element of the turnaround plan and from this position of strength, the transformation of our business continues at pace.”

Tesco CEO Dave Lewis is a headline speaker at the Festival of Marketing, which takes place on 10 and 11 October at Tobacco Dock, London. For more information and to book tickets, visit www.festivalofmarketing.com