Tesco's Dave Lewis overhauls management: What the analysts say

“This reshuffle reflected a core message of simplicity (less matrix structure), less overhead (more dual roles) and Lewis himself taking responsibility for the key area.

“Dave Lewis being both corporate chief executive and UK chief executive is sensible as most of Tesco’s value depends on them turning around the UK. Dave Lewis’s skills (branding, consumer insight, being external) are most needed in the UK. Having two people in charge of effectively the same business creates paralysis and conflict.

“Dependent on how deep the Tesco corporate restructuring goes (spin-off of international units, etc.), it is not yet 100% clear to what extent Tesco will ultimately need a dual structure of UK chief executive and corporate chief executive.

“Robin Terrell, head of customer, is the one new job title that is not so clear. Importantly though, we believe it is sensible that he has not stayed on as UK chief executive. While he may have had some of the right qualities for it, his main experience lies in the digital part of Tesco and as such he is associated with some of the recent over-extensions of Tesco (taking on Amazon, Netflix, Apple etc), that Dave Lewis will likely want to move away from.

“Benny Higgins [is] in charge of ‘group strategy’ and we would assume that means the banker (ex chief executive of Tesco Bank) is leading the disposal programme. This makes sense; he probably knows better how to deal with M&A Bankers than the rest of the management team.

“Jason Tarry [head of commercial for UK and the group] is very respected within Tesco, very little bad is said about him and he has had a successful run being in charge of clothing (F&F) for Europe. We would see him as a future potential chief executive candidate (for example if Dave Lewis becomes solely corporate chief executive and they appoint a new UK chief executive).

“David Hobbs (group business planning and strategy director) and Matt Atkinson (chief creative officer) are going. Why did Tesco ever think it needed a chief creative officer… it’s a supermarket! This fits with the need for simplification (elimination of roles, less matrix, bigger responsibilities and oversight for remaining exec members).

“Jill Easterbrook will lead the business transformation programme. Jill was in charge of a wide set of businesses before (Ireland, mobile etc.). The fact that she is now in charge of just the business transformation programme indicates to us that in those other business units, a layer of middle management has been removed. This is, in our view, a great move. To give one example: Ireland is a very big business for Tesco. Why should the chief executive of Ireland report into another layer rather than straight into the corporate chief executive?”

Bruno Monteyne, analyst at Bernstein Research

“Most importantly the new team can now press on with the construction of a credible trading strategy for Tesco UK, the success of which or otherwise will determine Mr  Lewis’s tenure as group chief executive.

“Showing a sense of responsibility, priority and ‎perspective, Lewis has taken charge of the UK, Tesco’s core, on a temporary basis, so relieving Robin Terrell of his broader responsibility. Terrell will become director of the customer, or marketing in traditional parlance, his forte, alongside elements of retail and online operations, which is a good move.

“That Lewis is ‘head of UK’ as a temporary appointment is also good news as Tesco is a big group that needs accountability and responsibility drilled into it again.

“So, the most enduring feature of the re-organisation is not that Dave Lewis is taking the helm of Tesco UK [but rather] the fact that it is a temporary position. It looks like an external appointment will be brought in in due course.”

“We also welcome the appointment of Benny Higgins to lead strategy in addition to Tesco Bank. It is not without exaggeration that ‎we state Higgins is one of the finest brains in these Isles.

“With his Scottish perspective and financial experience, he should form a strong intellectual triangle with Lewis and Alan Stewart in taking Tesco forward.

“We have stated before that we see Tesco as being a leaner, lower-cost, more agile and faster business ‎under Lewis. We note with interest the departure of two senior executives, Atkinson and Hobbs.

“Such change is rarely easy or without consequence, but it is necessary in Tesco’s case and so welcome to see. The departures should send a signal to the whole team that Lewis is decisive and as well as carrying carrots, he also has a stick.

“We are comfortable with the amendments to the UK team and we await to see whether there will be changes to the international team in time with Trevor Masters running Asia and Ken Towle being in charge of Europe.”

Clive Black, Shore Capital

“Yesterday’s UK management shuffle at Tesco raised several issues, not least why the Tesco investor relations department was previously under the control of the PR department rather than the finance director (what were they thinking?).

“The press has focused on the fact that new chief executive Dave Lewis has taken direct control of the struggling UK business himself, as his ill-fated predecessor Phil Clarke did, but he actually probably didn’t have much choice, given how denuded the talent pool is at Tesco and the difficulty in attracting new people to the troubled company. Tesco clearly has the biggest problems of the “big four” supermarket chains, but it’s hard to say that it has the best management team in the “big four”.”

Nick Bubb, independent analyst