Dave Lewis to step down as Tesco CEO

Dave Lewis, CEO of Tesco, is to step down from his “all consuming” role, handing the management of the UK’s largest food retailer to Ken Murphy, ex-CEO of Walgreens Boots Alliance, the US pharmacy group that runs the Boots chain in the UK.

54-year-old Mr Lewis said he needed to “recharge the batteries” five years after starting the Tesco turnaround. “The business never sleeps. It is 365 days, 24/7 – the operational intensity of retail is very high”. Mr Lewis who spent three decades at Unilever, was a surprise choice to lead Tesco when he succeeded Philip Clarke in 2014, when the group was reeling from an accounting scandal and criticism of its treatment of suppliers. Customers were deserting Tesco for cut-price German discounters like Aldi and Lidl. For the year to January 2015, it reported a £6.4bn loss.

Mr Lewis rebuilt customer and supplier confidence and trust and simplified Tesco’s business by selling ventures such as its Hudl tablet, Harris +Hoole coffee shops and noncore overseas operations.

In 2017, he courted criticism by purchasing a takeover of Booker, the wholesale group, at a time when the rebuilding of Tesco was far from complete. The deal looks to have paid off, increasing Tesco’s exposure to convenience retail and catering markets.

John Allan, Tesco chairman said Mr Lewis had “done an outstanding job in rebuilding Tesco” and that his resignation had been accepted with regret. The timing of this change hasn’t been particularly optional from that point of view”.

Mr Lewis who has run the grocer for the five years, told his chairman about a year ago that he was thinking of his next steps.

The target Mr Lewis set in 2016, for an operating margin of 3.5 per cent to 4 per cent had been achieved ahead of schedule. Across the past 12 months, the margin was 3.7 per cent and in the first half it was 4.4 per cent calculated under the new IFRS 16 lease accounting rules.

Dave Lewis’s reason for stepping back from one of the highest profile UK corporate roles is beguilingly simple, he has achieved what he set out to do.