dave lewis

This was supposed to be the moment the world delivered its verdict on Tesco boss Dave Lewis after his first tumultuous year at the helm.

However, having spent a good proportion of the past 24 hours facing suppliers, analysts and the press, at yesterday’s IGD Big Debate and at today’s first-half results, it was Lewis’ verdict on the previous Tesco management that made for some of the most interesting revelations.

Perhaps in a sign of greater confidence now he has figures under his belt, which, while far from cause for huge celebration, show solid progress in getting UK volumes heading back on track, Lewis was damning in his condemnation of the business decisions made by previous management.

It would have been unthinkable in years gone by to imagine an IGD audience dominated by suppliers listening to the Tesco boss apologise for the behavior of its top team - albeit one that has largely been dismantled under the new regime. But that’s exactly what Lewis did.

As he spoke of the “unintended consequences of taking the wrong choices”, Lewis said he had only one thing to say on behalf of the Tesco management –“sorry”.

“At the time of the greatest pressures in the industry for a very long time, we came from a place where our profitability was the highest, certainly in the UK and, depending on which measure you look at it, probably the highest in the world,” Lewis admitted, as he condemned the decision to steadfastly protect Tesco’s famous 5.2% operating margin at all costs.

“The management said: that’s it, we don’t care about the environment, that’s it, THE KPI.”  “We were at a point where there was no volume growth. We lost the virtuous circle that had built the Tesco business by using volume to bring down cost and pass it on to customers.”

Lewis blamed this obsession and the pursuit of growth at all costs squarely for the Tesco accounting scandal, which is again making national headlines this week amid speculation surrounding the outcome of the SFO inquiry, and talk of a deal being cut.

He went on to reveal that an investigation last winter by Tesco itself and accountants Deloitte had resulted in no fewer than 69 cases of behaviour by Tesco that could have been in breach of GSCOP.

Today, amid the news of tumbling profits but sustained improvement in its trading performance - both in the UK and globally - Lewis continued the theme, accusing his predecessors of displaying a “naked pursuit of growth”.

Things, he claims, are changing for the better, not just in results but in Tesco’s relations with its suppliers, with Lewis declaring “dramatic” and “unprecedented” improvements in their satisfaction scores.

The fact that this measure has gone from 51% to 60% hasn’t escaped the notice of some cynics, including My Local Boss Mike Greene, who tweeted: “@TheGrocer So Lewis is happy about supplier rating?! Wouldn’t 60% be a fail on most exams?…. certainly not near the top of the class.”

It’s true that if today was a school report, Tesco would be looking at a B at best, but Lewis certainly deserves an A for presentation.

Yesterday, in a delicious twist of irony, he even urged suppliers in the room to co-operate fully with Adjudicator Christine Tacon’s investigation, which is facing long delays - partly because so many suppliers are scared to come forward.

However, there is another reason why suppliers have not been inundating Tacon and why, privately, many admit they would be happy if Tesco does escape with a slap of the wrist from the SFO.

If Tesco truly has made a break with the past under Lewis, Tarry and co, and with the Tesco supertanker showing signs of turning at last, many suppliers do think it is time to look ahead rather than back.

“I wouldn’t put words in their mouth as to why they are not coming forward to speak to Christine and she can speak for herself on that,” Lewis told The Grocer today. “But I think that suppliers in very large numbers are saying that they appreciate and enjoy the way that Jason and myself and the team are leading the business.

“We said those potential breaches of the code were a stimulant for what we wanted to change and we’ve learnt our lesson.”

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