Lewis has been at the helm of Tesco’s turnaround plan, joining the business in 2014 shortly after an accounting scandal which revealed the company had been overstating its profits. Tesco subsequently revealed a loss of £6.4bn, the biggest-ever suffered by a UK retailer.
The surprise announcement comes as the ‘Big Four’ grocer reported a 6.7% increase in profit before tax to £494m in its latest interim results, in which Lewis declared the company has “delivered every element” of the turnaround plan he helped devise.
Lewis said that his decision to step down was a “personal one” and that he believed that now is the right time to “pass the baton”.
He said: “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. Colleagues are doing an extraordinary job and their expertise shows in every store and channel every day.
“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. When that time comes, I will watch progress from outside with interest, deep affection and pride. In the meantime, you can be sure that I will give the job everything I have until my very last day.”
John Allan, Tesco chairman, said: “It is with regret that I have accepted the resignation of Dave Lewis as Group CEO of Tesco, who has decided that he wants to leave the business in the summer of 2020.
“Dave has done an outstanding job in rebuilding Tesco since 2014 and he continues to have unwavering support from the board. Some time ago, however, he indicated to me that he was considering the best time to hand over to a successor. His openness allowed me to begin a thorough and orderly process to identify a potential candidate to replace him.”
He added: “As a result, today, we have appointed Ken Murphy to succeed Dave as group CEO of Tesco next summer. 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.”