Lewis: Tesco will 'finish' turnaround this year

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Tesco boss Dave Lewis has revealed the grocer is eyeing new avenues for growth and value creation following another “strong” year on its road to recovery.

Lewis said Tesco will “finish the job” of its turnaround strategy in 2019/20 – a milestone that has allowed it to start looking at longer-term targets.

Tesco’s chief executive said the supermarket giant had “an awful lot” of “untapped value opportunities” to go after in the next phase of his plan, as he seeks to build further momentum.

Tesco registered a 28.8% jump in pre-tax profit to £1.67bn in the year to February 23, as the group’s operating profit margin hit 3.45% – within touching distance of the 3.5%-4% goal it set itself in 2016.

Like-for-likes in its core UK business advanced 1.7% across the year. A 1.7% uptick in the crucial Christmas trading period marked the 13th consecutive period of like-for-like growth in Tesco’s domestic market.

But Lewis said Tesco is now looking to build on that performance and plans to outline some of the opportunities he sees for the business at a Capital Markets Day in June.

When asked for more detail on those this morning, Lewis said: “The wonderful thing is, there is an awful lot of them.

“What we will talk about, having got ourselves through the turnaround, is what comes next. There are opportunities from product, there are opportunities in the way that we run our channels and go to business – and that includes Booker, but it includes other things as well. We think there are a lot of opportunities to do things better and differently for customers.

“But there are also differences in the way we can run the Tesco business. We will share some of the transformation plans we have for some of the functions in the business.

“So the good news is there are a lot of untapped value opportunities and, having delivered on the ambitions we set for ourselves in terms of the turnaround, it feels that this year is the right time to start talking about some of them.”

Lewis shrugged off suggestions that lingering uncertainty around Brexit could derail his plans. He admitted Tesco had seen “some concern in what people were saying”, but insisted the grocer had witnessed “no change in behaviour in what people are doing”.

He said: “We have not seen any softening, we have not seen any discernible change in buying behaviour through the fourth quarter or into the early part of this year.”