Tesco CEO Dave Lewis to step down as turnaround nears completion
By Prachi Singh
2 Oct 2019
Tesco In its interim results statement for the first half, Tesco Group said, sales grew by 0.1 percent at actual rates, including a 0.5 percent foreign exchange translation benefit due to the depreciation of Sterling to 31.1 billion pounds (38.1 billion dollars). At constant rates, the company added, sales grew in all regions apart from Central Europe. Tesco said that all regions were impacted by actions to refocus the general merchandise offer on sustainable, profitable categories, with total group sales impacted by 0.4 percent as a result. The company also announced departure of the current CEO Dave Lewis, who is stepping down next year. Ken Murphy has been appointed as successor.
Commenting on the trading update, Lewis said: “Despite challenging external conditions we have delivered a very good start to the year. With the turnaround complete and as we begin to implement the next steps of our sustainable growth strategy, now is the right time to plan a smooth and orderly succession. As such, I will step down as Group CEO next summer and pass the baton to Ken Murphy.”
Tesco’s performance across core geographies In the UK and the Republic of Ireland (ROI), Tesco said, total sales grew by 0.2 percent against a backdrop of subdued market growth, particularly in the second quarter with significant headwinds from last year’s exceptionally warm weather, the World Cup and Royal Wedding. The closure of Tesco Direct, its UK online general merchandise business, in July 2018 impacted overall UK & ROI performance by 0.4 percent. In ROI, the company’s sales grew by 0.5 percent at actual rates. Total sales performance includes a new store contribution of 0.5 percent, relating to the opening of Liffey Valley Extra in May last year.
Excluding Poland, sales in Central Europe reduced by 2.7 percent at actual exchange rates in the first half driven by the impact of store closures and by 1 percent from reduced general merchandise sales. The majority of overall sales reduction of 7 percent at actual exchange rates in Central Europe was driven by actions to re-shape the business in Poland.
In Asia, the company said, total sales grew by 8.4 percent at actual exchange rates, and by 1 percent at constant rates, while like-for-like sales reduced by 1.3 percent, principally as a result of reduced general merchandise sales.
Group operating profit was 1,406 million pounds (1,724 million dollars), up 24.4 percent at constant exchange rates and 25.4 percent at actual rates. UK & ROI operating profit before exceptional items and amortisation of acquired intangibles was 1,085 million pounds (1,329 million dollars), up 28.4 percent, with operating margin growth of 90 basis points year-on-year.
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