Tesco surprises markets by naming Irishman Ken Murphy its next CEO

Supermarket giant says incumbent Dave Lewis will exit next summer

Low-profile Cork accountant, Ken Murphy, has been thrust into the spotlight after he was named as next-in-line for one of the biggest jobs in European retailing, group chief executive of the £23.5 billion (€26.4 billion) grocery juggernaut, Tesco.

Mr Murphy, a former senior executive at the Anglo-US company that owns Boots, will take over at Tesco from the incumbent, Dave Lewis, who surprised markets on Wednesday by announcing he will quit next summer.

The Irishman’s impending appointment surprised many analysts, who had not expected that Mr Lewis would be replaced by a low-profile figure with no experience in grocery retailing.

"Why [has] Tesco overlooked an array of internal candidates for the new CEO position and . . . gone outside and appointed Ken Murphy from Boots (aka 'Ken who?')," said Nick Bubb, an independent retail analyst, in comments reported by Bloomberg.


‘Impressive operator’

However, Irish business sources familiar with Mr Murphy, who previously served on the commercial advisory broad of Munster rugby, told The Irish Times he is "a very impressive operator" with a "wide perspective".

Mr Murphy (53), studied commerce degree at University College Cork in the late 1980s after attending a Christian Brothers school in the city. He trained as an accountant at Coopers & Lybrand, before joining consumer goods giant Procter & Gamble, a rival of Unilever, where Mr Lewis then worked.

He then joined Unichem, which was eventually folded into the company that owns pharmacy chain Boots, working for it in the UK and latterly in the US.

He was made joint chief operating officer at Boots UK & Ireland before rising to executive vice president, chief commercial officer and president global brands at Walgreens Boots Alliance, based in Chicago. He left last December.

"Dave has done an outstanding job in rebuilding Tesco since 2014 and it continues to have unwavering support from our board," Tesco chairman John Allan told analysts on Tuesday. "Some time ago, however, he indicated to me he was considering when was the right time for him to hand over to a successor."

‘Business leader’

Mr Allan said that Mr Murphy was a “seasoned growth-orientated business leader” and had “strong strategic brand and commercial acumen”.

Tesco, which has a 21.5 per cent share of the Republic’s grocery market and 27.4 per cent of the UK market, is at the back end of a recovery plan under Mr Lewis that was instigated after a 2014 accounting scandal.

Mr Lewis’s planned exit after six years at the group came as Tesco reported a better-than-expected first-half operating profit before one of items of £1.4 billion (€1.5 billion), a rise of 25.4 per cent.

The group also reported 0.5 per cent sales growth in the Republic, where it has 152 stores and ranks as the second largest grocery retailer.

– Additional reporting: Reuters/Bloomberg

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

Mark Paul

Mark Paul

Mark Paul is London Correspondent for The Irish Times