Tesco’s chief executive Dave Lewis prepares to brave City spotlight

Tesco chief Dave Lewis faces a defining moment when he presents his first results and sets out his priorities for the ailing giant.

Lewis will address the City for the first time on October 23^rd when the grocer reveals its postponed interim results. Analysts will be looking for reassurance about the health of the business and will also want details about the impact of the £250m accounting scandal – which Lewis was forced to reveal just 10 days into his role. While he is not expected to unveil his full strategy until early 2015, investors will want to understand his priorities.

Lewis has already emphasised his determination to focus on customers. He told staff on his first day that Tesco can once again become the “customers’ champion”.

Observers have looked at the big strategic moves Lewis made at Unilever for signs of what he may do at Tesco. At Unilever, Lewis focused on core ranges – with emphasis on big brands such as Dove. He took a hard line on costs and was determined to simplify the businesses he took charge of.

Shore Capital analyst Clive Black said it is imperative to improve Tesco’s UK performance. He expected a margin reset with price investment to form part of Lewis’s plans.

He added: “Tesco has to be more price competitive on fresh and chilled food in particular and price competitive against the discounters.”

The accounting scandal has engulfed the grocer at a critical time when Lewis needs to focus on trading as it enters the crucial Christmas period on the back foot. Lewis has already committed to putting more staff hours into stores in the run-up to the festive period amid an intensely competitive marketplace that has precipitated ferocious price battles among the big four.

Cantor Fitzgerald analyst Mike Dennis said: “We believe Tesco’s ability to operate could be compromised at a critical period ahead of the start of the build-up to Christmas trading.”

Three more Tesco executives were suspended this week in the investigation into its profit overstatement. They are believed to be Dan Jago, head of beer, wine and spirits; director of convenience Sean McCurley; and category director William Linnane. It is understood no further exits are in the pipeline at present.

The departures follow the suspensions of Tesco UK boss Chris Bush and Kevin Grace, commercial director.

It also emerged that company secretary Jonathan Lloyd has resigned. He is understood to have handed in his notice before the accounting scandal and will stay until March. Tesco is also expected to part company with chairman of the audit committee Ken Hanna.