The supertanker was sinking fast. Lewis’ predecessor Phil Clarke had overseen a disastrous reign littered with profit warnings, a collapse in the share price and falling market share.
Tellingly, Tesco emerged as one of the biggest losers from the growth of German supermarkets Aldi and Lidl, who today look less like foreign upstarts and more like genuine threats to the established domestic grocers.
In many respects, Lewis couldn’t do much worse than his predecessor. Despite a £326m black hole in Tesco’s finances being uncovered soon after he took the helm, the man dubbed “drastic Dave” got to work.
He overhauled the board, axing the vast majority of those who served under Clarke, spoke about changing the culture of the company and most recently dumped corporate communications agency Brunswick, marking the completion of total severance from the previous regime.
Critically, Lewis has slashed prices in an attempt to not only better compete with discounters Aldi and Lidl, but also in an effort to re-engage with the British public.
There had been a real danger that Tesco’s reputation for value supermarket shopping would evaporate under Clarke. However, while price cuts had a positive effect initially – with Tesco seeing an uptick in sales over Christmas – the momentum Lewis had hoped to garner has failed to materialise.
According to data form Kantar Worldpanel, Tesco’s market share is still in decline. The retailing giant’s share price has fallen 30 per cent in the past six months and a number of asset sales, which were aimed at boosting the balance sheet, look to have stalled.
Price cuts have come at the cost of margin erosion and one retail analyst has even said that, despite all of Lewis’ initiatives, there is still a lack of “clarity on the group’s overall direction”.
Tesco reports its interim results next week and they will rightly be viewed as a barometer of how well Lewis is performing. A year at the helm, a complete overhaul of the business and a generous pay packet mean there is little room for excuses.