The new Tesco boss has admitted problems at Britain’s largest supermarket are worse than he thought when he took the job last month – but insisted he would have taken on the role anyway.
Dave Lewis, who previously served as CEO of Unilever, inherited a ticking time bomb as the supermarket battles its worst crisis in decades with falling sales, a deepening accounting scandal and plummeting share prices.
The discovery of a £263 million black hole in the company’s profit forecasts – pushed up today by an independent review from an original estimate of £250 - has resulted in the suspension of eight top executives and the resignation of the group’s chairman Sir Richard Broadbent.
Discussing the today's results, Lewis said: “Some of the numbers have changed, some of the reasons behind those numbers mean that I have to think about how I change the business in perhaps slightly more of a way than I would have done beforehand.”
The reference to the accounting irregularities suggests that Lewis, the first CEO to come from outside of Tesco, was not aware of how deeply troubled the chain was when he took over from former CEO Philip Clarke on 1 September.
Despite taking on a supermarket on the brink of disaster, Lewis insisted he would still have embraced the CEO job had he known exactly what he was letting himself in for.
“We’ve got some things to sort but that’s fine that’s life – we will deal with that. So I still feel extremely positive about what it is we can do…” he said.
The results of an independent review led by accountancy firm Deloitte and law firm Freshfields have revealed the errors in accounting go back over more than three years.
Lewis said the report would be passed to the Financial Conduct Authority. In addition, former CEO Clarke will have to wait for the FCA to conclude its investigation to receive his severance pay estimated at £10 million.
The FTSE 100 company also admitted it could no longer provide full-year profits estimates, rattling market confidence and sending the share price to record lows.
Tesco has said there is no evidence of fraud or personal gain from the mis-statement of profits.Reuse content