Former Tesco boss Dave Lewis knighted after turning around grocery giant

PA

Former Tesco boss Dave Lewis has been knighted after turning around the fortunes of the UK’s largest private employer.

Mr Lewis, who was dubbed “Drastic Dave” for major cost-cutting at the start of his leadership, has been recognised in the New Year honours for his services to the food industry and business.

When he arrived at Tesco in 2014, his first major task was to announce the company had overstated its historical profits by £326 million.

The accounting scandal led to a company fine of £129 million and £85 million in compensation for investors, and was soon followed by a £6.4 billion loss at the supermarket giant.

Tesco Extra
Tesco Extra

However Mr Lewis, who had joined the retailer from consumer goods giant Unilever, set it on the path to recovery over the next six years.

He dramatically slashed costs across the business and sold off non-core parts of the retail business.

Tesco surged to a £551 million pre-tax profit in the half-year to September, in Mr Lewis’ final period in charge of Tesco, before Ken Murphy took over the role the following month.

It delivered a 29% jump in profits despite facing heavy costs due to the pandemic as it benefited from surging demand for groceries and the rapid expansion of its online operations.

It followed a strong 2019-2020 financial year, which had seen Mr Lewis handed a £6.42 million pay packet by the company board, representing a more-than-30% jump in his total pay.

However, shareholders voted against the pay deals for its directors, including Mr Lewis, with 67.3% of votes at its annual general meeting being cast against the pay package.

The knighthood also comes after a year which saw Tesco create more than 16,000 permanent jobs during the pandemic, as it battled significant supply chain pressures to get food on to shelves.

Shortly after his departure, the supermarket giant also became the first non-essential retailer to say it would hand back business rates support it received during the pandemic.

Tesco handed back £585 million in business rates relief and caused a domino effect among its rivals which has seen about £2 billion repaid to the state.