Tesco announced today that Booker boss Charles Wilson will be appointed as CEO of its retail and wholesale operations in the UK and Republic of Ireland upon completion of its merger with the wholesale giant. Matt Davies, CEO of UK & ROI, will leave at the end of April. Here is how analysts and other experts reacted to the news:
Dave McCarthy, HSBC
“Charles Wilson is one of the most respected individuals in British industry and recognised as one of the best retailers in the world. Tesco hadn’t previously identified what his role would be but we knew he would effectively be number two to Dave Lewis. He is going to be heading a combined business with more than £50bn of turnover and will have an extremely important role. Matt Davies has done a very good job, there’s no question that he’s helped motivate the troops. He came with a good reputation and he will leave with a better one.”
Bruno Monteyne, senior analyst, Bernstein
“The appointment clarifies the question of what Charles Wilson’s role will be in the combined Tesco Booker group. Wilson has an excellent track record at Booker and we expect the appointment to be taken positively by the market, with Charles leading approximately 80% of the group, rather than just the Booker B2B activities. Tesco expects underlying operating profit of at least £1,575m for FY 2017/18. This is 70bps ahead of the current consensus of £1,564m. The forecast is made three weeks before the year end and we believe represents their forecast for the minimum possible group operating profit for the full year.”
Clive Black, Shore Capital
“We hold Mr Wilson in the highest regard; more melancholy is the loss of Matt Davies in April. Profit guidance for FY 2018 is also provided, better than our forecast by 2.5%, which we welcome, whilst a 2.0p final dividend is ‘declared’, a smidgeon behind our forecast. All in all it is pleasing to see Mr Wilson going straight to the heart of the business while it is reassuring that Tesco is on track to marginally outperform our FY 2018 expectations.”
Nick Bubb
“When we saw the separate Tesco announcement headlines today about ‘Directorate Change’ and ‘Profit and Dividend Forecast’ we at first thought something important had happened like CEO Dave Lewis had resigned and that Tesco was rushing to provide reassurance. Tesco is publishing the documentation today on its long-awaited merger with Booker, ahead of an EGM on 28 February. Tesco has said that, since its Christmas update on 11 January, the group’s trading performance has been in line with management’s expectations and it expects to deliver at least £1.575bn operating profit before exceptional items for y/e February, and plans a final dividend. To nobody’s surprise, Booker boss Charles Wilson is to be appointed as CEO of Tesco’s UK retail and wholesale operations and the current Tesco UK boss, the estimable Matt Davies, is to leave the group at the end of April.”
Molly Johnson-Jones, senior analyst, Food & Grocery Retail, Global Data
“I certainly wouldn’t rule out this being the first step towards Charles Wilson becoming the new Tesco number one, with Dave Lewis leaving. I think the biggest risk for Tesco is that it has so much on its hands with the Booker deal and a move into the wholesale sector, that is takes its eye of the ball when it comes to the core retail business.”
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