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| Tesco boss Dave Lewis in shock departure | Tesco boss Dave Lewis in shock departure |
| (about 1 hour later) | |
| Tesco has announced that its chief executive Dave Lewis is stepping down after five years in the role. | Tesco has announced that its chief executive Dave Lewis is stepping down after five years in the role. |
| Mr Lewis said the decision was a "personal one", and Tesco chairman John Allan said he had accepted the resignation with "regret". | Mr Lewis said the decision was a "personal one", and Tesco chairman John Allan said he had accepted the resignation with "regret". |
| He will be replaced next year by Ken Murphy, who has held senior positions at the owner of chemist chain Boots. | |
| The departure was announced as Tesco reported a 6.7% rise in first-half profits to £494m. | The departure was announced as Tesco reported a 6.7% rise in first-half profits to £494m. |
| Mr Lewis said: "I believe the tenure of a chief executive should be a finite one and that now is the right time to pass the baton. The turnaround is complete, we have delivered all the metrics we set ourselves." | |
| Analysts at Shore Capital said Mr Lewis was "quite simply he is the bloke that saved Tesco". | |
| He took the helm at a tumultuous time for the supermarket group, announcing shortly after he took over in 2014 that the retailer had been overstating its profits. | He took the helm at a tumultuous time for the supermarket group, announcing shortly after he took over in 2014 that the retailer had been overstating its profits. |
| The company subsequently revealed a loss of £6.4bn, the biggest-ever suffered by a UK retailer | |
| Since then Mr Lewis has set about reducing costs, with the latest of round job cuts announced in August when it said 4,500 staff in 153 Tesco Metro stores would lose their roles. | Since then Mr Lewis has set about reducing costs, with the latest of round job cuts announced in August when it said 4,500 staff in 153 Tesco Metro stores would lose their roles. |
| He also took on the discounters Aldi and Lidl by opening Jacks, Tesco's own discount chain. | He also took on the discounters Aldi and Lidl by opening Jacks, Tesco's own discount chain. |
| 'Total surprise' | 'Total surprise' |
| Mr Lewis also orchestrated Tesco's 2017 takeover of Booker, the biggest food wholesaler, in a £3.7bn deal to create the "UK's leading food business". | |
| He now intends to leave "in the summer of 2020" according to the chairman. | |
| Bernstein analyst Bruno Monteyne told BBC Radio 4's Today programme that there had been speculation about Mr Lewis' future after that deal as Booker's chief executive Charles Wilson has joined at the time. | Bernstein analyst Bruno Monteyne told BBC Radio 4's Today programme that there had been speculation about Mr Lewis' future after that deal as Booker's chief executive Charles Wilson has joined at the time. |
| "We're all trying to grapple exactly about the timing right now," said Mr Monteyne. His departure now was "a total surprise", he said. | "We're all trying to grapple exactly about the timing right now," said Mr Monteyne. His departure now was "a total surprise", he said. |
| Mr Lewis had joined five years ago "at a very difficult moment" for Tesco, Mr Monteyne said. | |
| "Not only had it lost the trust of the customers, losing material market to the discounters, it ended up with an accounting fraud... internal morale broken. He really took over a broken company, and from being the most profitable retailer in Europe, suddenly had losses for the first time ever." | |
| As with comedy, timing is everything in big business. Many chief executives overstay their welcome, failing to realise that the clock is always ticking; the average tenure of a FTSE 350 chief executive is 4.5 years, and coming down. | |
| Dave Lewis, however, is clever enough to know that it's best to leave while the going is good. | |
| He joined Tesco when it was in disarray and at a time of some drama. There had been a string of profits warnings, a boardroom bust-up leading to the departure of the chief executive and a nasty accounting scandal. | |
| Mr Lewis moved quickly to tackle an ingrained corporate culture by changing the senior management, moving the company's head office and letting thousands of staff go. | |
| The returns show in today's half-year results, which were rather overshadowed by Mr Lewis's departure - sales were flat, but the operating margin hit 4%, a year before Mr Lewis said it would. | |
| That is an achievement but Mr Lewis will know that running Tesco will not get any easier. | |
| The discounters Aldi and Lidl are still nipping at its heels, and now threatening to make serious inroads into the London market. Sainsbury's has made it clear it is prepared to cut costs hard to stay competitive on price, and Morrisons is enjoying a return to form. | |
| Keeping Tesco at that level of operating margin is going to be a long, hard slog. | |
| There will inevitably be speculation that he will return to Unilever, the Anglo-Dutch consumer goods giant where he worked before joining Tesco. | |
| In its results for the first six months of its financial year, Tesco announced that its operating profit, which does not include one-off items, rose by 25% at £1.4bn. | |
| Like-for-like sales, which strip out revenue from new stores opened during the six months, rose 0.1% in the UK and Ireland. | |
| At a group level, including operations in central Europe, notably Poland, and Asia, same store sales fell 0.4%. | |
| Mr Lewis said it had been a "strong start" to the year, and analysts said the numbers were better than expected. | |
| Mr Lewis joined Tesco from household goods company Unilever and his successor, Mr Murphy, has been hired after a lengthy career with Boots, which is now part of Walgreens Boots Alliance. | |
| Mr Murphy will receive a £1.35m salary before bonuses and his joining date has not yet been confirmed. |