Tesco shares: Leave on the shelf or worth a purchase?

Britain's biggest retailer Tesco said Wednesday thaCEO Dave Lewis will step down next year, and will be replaced by Walgreens Boots Alliance executive Ken Murphy.

Lewis, who has overseen a radical overhaul of Tesco since his appointment in 2014, added that the group's turnaround was "complete" and he desired to move onto new challenges.

"My decision to step down as group CEO is a personal one," he said in a group statement issued alongside first-half earnings.

"I believe that the tenure of the CEO should be a finite one and that now is the right time to pass the baton.

"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."

Former Unilever director Lewis was parachuted into Tesco in July 2014 to help turn around the group.

More than 10,000 jobs have been cut in a far-ranging cost-cutting drive at Tesco, since Lewis took charge with the brief to save £1.5 billion.

He took the reins just as the group was rocked by crisis in October 2014 after overstating profits in an accounting error.

During his tenure, the group has sought to slash costs and fight back against booming German discounters Aldi and Lidl in home market Britain.

"Dave has done an outstanding job in rebuilding Tesco since 2014 and he continues to have unwavering support from the board," said Chairman John Allan.

"Some time ago, however, he indicated to me that he was considering the best time to hand over to a successor."

Turning to the new CEO, he added: "Ken has values which align with our own, strong strategic and operating acumen, and is proven at the very top of a large and respected multinational retail group.

"I firmly believe we have the right person for the job."

Tesco added on Wednesday that its first-half net profits slid four percent to £324 million ($398 million, 364 million euros) from a year earlier.

However, it had rebounded into annual net profit last year on strong sales and restructuring following a net loss of £40 million in 2016/2017 -- when it was hurt by costs arising from the accounting scandal.

Tesco said Lewis will depart in the summer, while Murphy's start date will be given at a later date due to contractual commitments.

Murphy is currently executive vice president, chief commercial officer and president of global brands at Walgreens Boots Alliance.

Tesco is the world's third-biggest supermarket chain after France's Carrefour and global leader Wal-Mart of the United States, and also has global operations dotted elsewhere including China, India, Ireland, Malaysia, Slovakia and Thailand.

Copyright AFP. All rights reserved.

Tesco CEO to step down
Tesco CEO Dave Lewis will hand over the reins to Ken Murphy next year. Photo: AFP / Tolga AKMEN