The heat has just been turned up a few notches on incoming Tesco CEO Dave Lewis with the announcement that former Tesco finance director Andrew Higginson (left) is to be the next chairman of rival Morrisons.
Morrisons CEO Dalton Philips may also be feeling the flames around his feet following a disastrous period in which profits have plummeted and the store group has been forced to plough approximately £1bn into price cuts to fend off all-conquering discounters Aldi and Lidl.
Why should Lewis, who is joining from Unilever’s Personal Care division, be worried? Higginson was last but one Tesco CEO Sir Terry Leahy’s right hand man for 15 years so if anybody knows where the bodies are buried at Tesco he does. And although he’s to be non-executive chairman at Morrisons he will surely take a keen look at its day-to-day operations. He takes over as chairman from Sir Ian Gibson in 2015 but is joining as deputy chairman in October, when Lewis starts at Tesco.
None of the so-called ‘big four’ UK supermarkets are really in a position to take on Aldi and Lidl without taking a knife to their margins and therefore profits and dividends. Morrisons is trying with its ‘ New Cheaper Morrisons’ campaign while Asda, owned by Walmart, is in the best position as it doesn’t have to worry about external shareholders or the City.
Lewis made his name at Unilever with campaigns for brands like Axe/Lynx and Dove. He was also known as ‘Devastation Dave’ at one point after axing hundreds of jobs when boss of Unilever UK and Ireland – so he’s no soft touch. But running Tesco is a challenge of a wholly different order and he’ll need some experienced retail hands around him.
As for Morrisons boss Philips it could be time to look for “new challenges” – as they say.