Tesco is expected to post a surge in profits to £1.8billion as supermarket boss David Lewis prepares to step down after six years in charge.
The supermarket giant is set to record pre-tax profits, for the year to February, up from £1.56billion last year.
It will be the final full-year for Mr Lewis, 54, who has been credited with stabilising Tesco during his time at the helm.
Tesco is expected to post a surge in profits to £1.8billion as supermarket boss David Lewis prepares to step down after six years in charge (stock image)
Shares in Tesco remain at similar levels to those achieved twelve months ago despite the recent financial uncertainty facing many businesses in the face of the coronavirus epidemic.
Supermarket stocks, such as Tesco, have been broadly resilient as panic buying of essential items, such as pasta, flour and toilet roll, has helped to drive a surge in sales.
Supermarkets dealt with record levels of demand in March with combined grocery sales rising by 20.6 per cent in the last four weeks, according to figures released by Kantar earlier this week.
The survey also showed that Tesco sales were particularly strong and had jumped 5.5 per cent.
Russ Mould, at investment platform AJ Bell, said that the rise in sales had provided ‘some respite from the market share war with Aldi and Lidl as punters flock through [Tesco’s] doors so they can stock up’.
It will be the final full-year for Dave Lewis, 54, (pictured) who has been credited with stabilising Tesco during his time at the helm
Analysts at Goldman Sachs said: ‘With the largest UK online grocery business and the broadest network of distribution points, we also believe Tesco is best positioned to respond to any demand spikes related to Covid-19’.
And analysts at Exane BN Paribas added that: ‘Whilst it is well understood that the food retailers have seen a surge in sales as a result of Covid-19, the impact on earnings and the longer-term is more complicated.’
It comes after the supermarket giant pledged to give a 10 per cent bonus to its staff on the frontline of the pandemic.
Supermarket stocks, such as Tesco, have been broadly resilient as panic buying of essential items, such as pasta, flour and toilet roll, has helped to drive a surge in sales. Pictured: Customers kept their distance as they queued outside Tesco in Leatherhead, Surrey, earlier this month
Supermarkets dealt with record levels of demand in March with combined grocery sales rising by 20.6 per cent in the last four weeks. Pictured: Member of staff waiting for a delivery in London on Sunday
Mr Lewis, nicknamed ‘Drastic Dave’, had shocked the business world when he first announced that he would be stepping down from his position as CEO.
He originally took the reins in 2014 after the group posted a £6.4billion loss.
Mr Lewis instigated a massive overhaul which saw thousands of jobs cut as well as radically changing the company’s culture, reducing product lines and shedding non-core activities.
The Tesco supremo had previously said 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 adding that the job has not been an easy one.
‘It is all consuming. The business never sleeps. It is 365 days, 24/7.
‘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.’
He will be replaced by Walgreens Boots Alliance executive Ken Murphy.
Mr 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.
He left his executive position at the U.S. retailer at the end of 2018 but retained a consultancy role, Tesco said.
Who is ‘Drastic’ Dave Lewis?
Dave Lewis, 54, chief executive of Tesco
Pay: In May 2019 it was revealed that Dave Lewis landed a hefty £4.6million pay packet after overseeing a turnaround for the supermarket that involved putting thousands of jobs on the line.
Lewis, who earned the moniker ‘Drastic Dave’ during his tenure at consumer goods giant Unilever, received a base salary of £1.25million, a £1.6million bonus and £1.3million through the grocer’s share plans.
Family: Grew up in Yorkshire but moved to affluent Richmond, south-west London. He had two daughters from his first marriage but remarried to Helena.
Background: Graduated from Trent Polytechnic, now Nottingham Trent University, with a BA in business studies. He also attended Harvard University in 2002, where he completed an advance management programme offered by the business school.
Career history: Worked at Unilever before being appointed Tesco boss in 2014. He was head of personal care in the UK for Unilever, where he earned the nickname ‘Drastic Dave’ for slashing hundreds of jobs. A former rugby player and fitness fanatic, Mr Lewis runs marathons and triathlons.
What he said on Brexit: Mr Lewis was impartial. He had also said: ‘It is not something that would significantly disadvantage Tesco, vis-a-vis the marketplace.’