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Posted on October 2, 2019 by staff

Tesco to double online capacity after shock CEO departure

Tesco to double online capacity after shock CEO departure

Lewis said decision was "a personal one"
Lewis said decision was "a personal one"

Tesco has revealed plans to double the capacity of its online operation while CEO Dave Lewis has resigned.

The supermarket giant made the shock announcement that Lewis will exit in summer next year, replaced by Ken Murphy of the Walgreens Boots Alliance, the owner of chemist chain Boots.

Lewis said the decision was “a personal one” while Tesco chairman John Allan said he had accepted the resignation with “regret”.

Lewis has turned around the fortunes of the retail business, which also reported a 6.7 per cent rise in profits in the first half of 2019 to £494 million.

“I believe that the tenure of the CEO should be a finite one and that now is the right time to pass the baton,” said Lewis as part of a statement to the London Stock Exchange.

“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.

“The Tesco brand is stronger and customer satisfaction is the highest it has been for many years.

“With these firm foundations and a competitive, sustainable growth strategy in place, I have no doubt that Tesco will kick on again under new leadership next year.”

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Group sales in H1 2019 were steady at £28.3 billion.

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

Tesco plans to open 150 Express stores over the next three years as well as four new superstores in the UK and Ireland.

It said it has established a more profitable, increasingly cash generative online operating model, which will enable it to forge ahead with plans to double its online capacity in the UK.

It will open three urban fulfilment centres by summer 2020 and plans to open more than 25 over the next three years.

Tesco also reported a 77 per cent increase in Clubcard app users to 1.54 million.

“Today’s results confirm that the Tesco turnaround has been delivered. Under Dave’s leadership Tesco has transformed customer satisfaction and rebuilt the business. We can now move forward with renewed confidence,” said chairman Allan.

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

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Murphy was joint chief operating officer at Boots UK & Ireland before rising to executive vice president, chief commercial officer and president global brands at Walgreens Boots Alliance.

Allan continued: “Ken is unquestionably, a seasoned, growth-orientated business leader. He has deep commercial, marketing and brand experience within retail and wholesale businesses, first with Alliance Unichem, and then with Boots.

“I firmly believe we have the right person for the job.”