Tesco head of online operations Robin Terrell is to lead the retailer’s UK business as it kicks off an urgent investigation into how its half-year profit guidance ended up being overstated by £250m.
New Tesco CEO Dave Lewis has asked four of the retailer’s senior staff to step aside while the investigation takes place. Tesco would not name the executives but confirmed its UK operations would be headed up by Robin Terrell temporarily. They are usually led by UK MD Chris Bush.
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Sources at Tesco said it was “highly likely” Terrell would remain in the post at least until Tesco’s interim results, which have now been put back until 23 October.
Lewis, who joined Tesco at the beginning of the month, stressed today’s shock announcement would not detract from his bid to turn the company around.
“We have taken some very clear and decisive action and we will pursue that investigation to its logical conclusion,” added Lewis.
“It’s a serious thing, it’s something that will take priority but its one of two things I will be focusing on, the second is the maintenance of this business.”
But today’s development was greeted with alarm by analysts.
“Although the errors did not occur on his watch, this is not a very auspicious start to Dave Lewis’ tenure,” said Neil Saunders, managing director of Conlumino.
“ Today’s announcement will further undermine market confidence in a company that has already lost a lot of investor goodwill.”
Clive Black, analyst at Shore Capital, said he was“ flabbergasted” by the development, adding: “Tesco has stunned the market.”