WHEN Dave Lewis first sat down behind his no doubt incredibly plush desk at Tesco HQ on September 1 2014, he would have been aware he faced a challenge, but perhaps not its true scale.
One brisk winter and enormous accounting scandal later, on April 22 the Unilever veteran was announcing a pre-tax loss of £6.4 billion.
Mr Lewis had been hired to turn around a business which although still dominant was slipping, its glory years under Sir Terry Leahy a distant memory.
The question was whether Mr Lewis had the strength to pick Tesco back up.
Over the last two years, a pattern of like-for-like growth began to re-emerge. Pre-tax profits for 2015 recovered to £202m, before falling to £145m in 2016, and £110m this year.
In both 2013 and 2014, that number was above £2bn.
Now, with an interim pre-tax profit of £565m, in an industry weighted to the second half, analysts are lavishing praise on Mr Lewis.
And rightly so. The grocery industry is in turbulence: competition has intensified, inflation is creeping up and consumers are becoming more demanding.
But Mr Lewis’ focus on lower prices and better service is clearly working, and investors will be cheered by their first dividend in three years. And yet Mr Lewis still has one more challenge to overcome, and this one is of his own making.
In spite of its performance, Tesco shares fell almost three per cent yesterday, as investors still cast doubt over the logic of the group’s acquisition of Booker.
The £3.7bn deal is currently being assessed by the CMA, and expected clearance may come as early as this month.
The deal does makes sense on a number of levels, not least giving Tesco access to the foodservice and growing convenience markets, but with the turnaround only half way there, the question is how much a distraction the integration of such a huge merger would be to the day to day running of the group.
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