Tesco chief executive Dave Lewis today shocked the City, revealing plans to step down next summer after six years running the retailer.
Lewis’s exit was the most eye-catching, announcing plans to quit without another job lined up. He will be replaced by Ken Murphy, a retail veteran who most recently held senior roles at Boots owner Walgreens before leaving late last year.
He remains a consultant to the pharmacy giant and his start date has not yet been decided.
Lewis said the job had been “all consuming” and he will take some time to consider his next move. He said: “The business never sleeps. It is 365 days, 24/7 . The operational intensity of retail is very high.”
Chairman John Allan said: “Dave has done an outstanding job as CEO of Tesco. We’re very sad that he’s decided to move on but we respect his decision.”
Allan said that, since Lewis first mooted his departure last year, they had met internal and external candidates.
Charles Wilson, the highly rated chief of Tesco’s wholesaler Booker, had been viewed as Lewis’s heir apparent, but Allan said: “He was very clear with both of us that while he is fit and well and doing a fantastic job in Booker he did not want to be considered.” He was treated for cancer last year.
Lewis, 54, will leave after six years in one of Britain’s top jobs.
He joined with the mandate to turn around a business ailing under predecessor Philip Clarke and it was quickly plunged into crisis by the discovery of a black hole in its accounts.
Lewis has spent much of his tenure restructuring the firm, improving margins, slimming product ranges and upgrading stores.
Analysts suggested a return to consumer goods or a move into politics could beckon for the former Unilever man.
Shore Capital analyst Clive Black said: “Lewis saved the company. He’s not just turned it around but has positioned it for a bright future. Huge achievements in a tough market.”
The City was miffed by low-profile Murphy’s appointment but Allan moved to stress his experience: “Ken is unquestionably a seasoned, growth-orientated business leader. Proven at the top of a large multinational retail business.”
Murphy will receive £1.35 million a year in pay, more than Lewis but with lower pension contributions.
Lewis departs with “good leaver” status, meaning he can cash in shares currently worth around £18 million in five years’ time.
Today the retailer reported a 25.4% jump in operating profits to £1.4 billion, while UK sales edged up 0.1%. It also revealed plans to double the size of its online operations.
Lewis said Tesco had no-deal Brexit plans in place, with logistics set to move away from the Dover to Calais route and capacity to store goods increased.
