Tesco and Waitrose bosses to step down

UK retailer Tesco has announced the surprise departure of its CEO Dave Lewis next year, a day after Waitrose confirmed managing director Rob Collins will step aside as part of a major restructure of the business.

Tesco CEO group chief executive Dave Lewis will leave the business in summer 2020 and hand over the leadership to Boots boss, Ken Murphy, the company announced today, as part of its half year results.

Lewis said he was pleased that the turnaround of the business had been completed and as the retailer begins to implement the next steps of its growth strategy, it was “the right time to plan a smooth and orderly succession”.

Chairman John Allan said Lewis had done an “outstanding job” rebuilding Tesco since 2014 and under his leadership Tesco has transformed its customer satisfaction, enabling the retailer to “move forward with renewed confidence”.

“We have an exceptional leadership team, a very clear strategy, a re-invigorated brand and financial strength,” he said.

He welcomed  Murphy, the executive vice president, chief commercial officer and president global brands at Walgreens Boots Alliance, saying he had values that aligned with Tesco’s, strong strategic and operating acumen, and was a proven record as head of a large and respected multinational retail group.

It came as the retailer announced a good start to the year, with group sales up 0.1% to £28.3 billion in the first half, and operating profits of £1.134 billion, although like-for-like sales fell by 0.4%.

“Despite challenging external conditions we have delivered a very good start to the year,” Lewis said.

“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. The Capital Markets Day in June laid out many opportunities for further, profitable growth and I’m delighted to share today the plans to step up our store opening programme, to increase our online capacity, the introduction of Clubcard Plus in the UK and the acquisition of Best Food Logistics as the next step in our Booker growth strategy.”

“We are in a strong position to generate sustainable growth within our existing capital expenditure allocation of £1.1 billion to £1.4 billion per year.”

The retailer is set to ramp up the rate of expansion for its Tesco Express format, with plans to open around 150 stores over the next three years, as well as opening three 3 Urban fulfilment centres by next summer, rising to 25 over the next three years.

Waitrose restructure

It comes the day after Waitrose announced that managing director Rob Collins will step down amid a major restructure of the business, which will see one management team span across the John Lewis and Waitrose business.

Collins’ role and the divisional boards have been removed and a new executive team is being assembled across the group that will have direct responsibility for the performance and strategy of the whole partnership,

Sir Charlie Mayfield, partner and chairman of the John Lewis Partnership, said Collins had been an outstanding leader for the Partnership who had made an enormous impact in modernising, strengthening and differentiating the business.

He said that as one of the central architects of the new plans, it was a testament to his character that his commitment to the right course for the Partnership had not wavered despite his own role being removed in the new structure.

Members of the executive team to be confirmed so far include new chairmanSharon White, executive director of brand Paula Nickolds, finance, Patrick Lewis, people, Tracey Killen, operations, Andrew Murphy, and customer service Bérangère Michel. The executive directors of trading and strategy are yet to be appointed.

It has yet to be confirmed if any of these changes will affect the BWS operation.