British supermarket king Tesco is to parachute in its new chief executive a month early after a significant worsening of its trading position forced the retailer to act.
Dave Lewis had been due to take the helm of the struggling grocer in October but will now be rushed in on Monday morning (1 September) in a desperate bid to halt the slide.
This comes after Tesco announced it expected to undershoot its projected trading profit for the year by hundreds of millions following a dismal first six months. Markets had been expecting this figure to come in at around £2.8bn but after the first half of the year brought in just £1.1bn. Tesco now expects the full year figure to be no more than £2.5bn.
In addition to the change at the top Tesco will also slash capital investment by a further £400m to no more than £2.1bn, marking a £600m reduction from the previous financial year.
In a statement Tesco acknowledged: “The business continues to face a number of uncertainties, including market conditions and the pace at which benefits from the investments we are making flow through in the second half and consequently the board has revised its outlook for the full year.”
Lewis faces an arduous task on Monday morning to stem the bleed, with cutbacks to its IT investment and store refurbishment programme.
Phil Dorrell, director of Retail Remedy, said that the cut in dividend by the supermarket highlighted the problem that it was facing: "Throw in the fact that Dave Lewis is being parachuted in a month early and you have a grocer that is truly on the rack.
"Dave Lewis has his work cut out, and then some, when he joins next week," he continued, claiming that Lewis would likely be 'delighted' to be joining following "such bad news."
Dorrell added: "It highlights the continuing saga of profit leak that clearly runs deeper than most feared.
“For Tesco, right now, it will be feeling like Autumn metaphorically, not just literally.
"What's certain is that we won't be seeing a rapid turnaround. Tesco is an oil tanker and any material change of direction will not happen quickly.
"In the weeks and months ahead, Dave Lewis and his team will need to rethink the entire Tesco model," he concluded.