Dave Lewis faces 'big challenge' at Tesco says Unilever boss

Paul Polman says appointment of Dave Lewis as Tesco chief executive shows strength of Unilever

Dave Lewis faces 'big challenge' at Tesco says Unilever boss
Dave Lewis launched Dove while he was at Unilever Credit: Photo: DOVE

Dave Lewis faces a “big challenge” as the new chief executive of Tesco, according to his boss at Unilever, Paul Polman.

Mr Lewis has been poached from his role as head of personal care at Unilever, whose brands include Lynx and Dove, to become the boss of Tesco from October 1.

Mr Polman, chief executive of Unilever, said it was a “wonderful opportunity” for Mr Lewis and that he was “very happy” for him.

“He is a good friend,” said Mr Polman. “I have offered time to help on being a chief executive. It is never easy, he has a big challenge.”

The incoming Tesco boss has worked for Unilever his entire career, joining Unilever as a graduate in 1987. Mr Polman said Mr Lewis’s move to Tesco was a “testimony to the management team” at Unilever.

“We have spent a lot on expanding our talent,” Mr Polman added. “You have to expect when you have a management team that there will be rotation.”

Mr Polman joined Unilever as chief executive in 2009 from Nestle, where he was chief financial officer, and said his experiences meant he did not want to prevent Mr Lewis from leaving. “It is very hard to say don’t take this wonderful opportunity,” he explained.

Tesco is the world’s third biggest retailer but its decision to turn to Unilever management for its new chief executive has put the spotlight on the success of the Anglo-Dutch group.

Mr Lewis is not even on the board of the company, although he is one of top executives and was regarded as potential successor to Mr Polman.

The Unilever boss was speaking as his company reported a 3.7pc growth in underyling sales for the first half of 2014, which was slightly below what the City expected.

Unilever said that total sales dropped 5.5pc to €24.1bn (£19.1bn), which was partly the result of disposals, although pre-tax profits rose 15pc to €4.2bn.

The company’s performance is being dragged down by tough economic conditions in continental Europe – where underlying sales fell – and weakening currencies and economies in emerging markets.

The movement in currencies is posing a dilemma for Unilever as to whether it increases prices in weakening emerging markets in order to protect margins.

Unilever’s food business, which includes Flora, Hellmann’s and Knorr, is also underperforming. The food arm is focused on the US and Europe, where supermarkets are being squeezed by a price war and the rise of the discounters.

Shares in Unilever dropped 18p, or 0.67pc, to £26.65 following the results.

However, its share price is up more than 7pc this year, giving Unilever a market value of £78bn, more than three times the £22bn value of Tesco.

Mr Lewis is not the first Unilever manager to leave for a senior role elsewhere. The company is following in the footsteps of companies such as General Electric, Procter & Gamble, and McKinsey by becoming a hunting ground for recruitment advisers and rival businesses.

In 2012, Mark Tarchetti, head of global strategy at Unilever, joined Newell Rubbermaid, the maker of plastic food containers, where the chief executive Michael Polk was also from Unilever. Meanwhile, chocolate maker Barry Callebaut hired Unilever executive Peter Boone to lead its research and development. Patrick Cescau, chief executive of Unilever before Mr Polman, is the senior independent director at Tesco and chairman of InterContinental Hotels Group.

The depth of Unilever’s management team was shown by its decision to replace Mr Lewis internally. Alan Jope, a Scot, has been promoted from president of Unilever’s operations in Russia, Africa and North Africa, Middle East and Turkey. Mr Jope is credited with turning around Unilever in China and is already regarded as a potential successor to Mr Polman.

Unilever’s senior team have been targeted because of the success of the company in the last ten years, its size, and also the quality of the company’s training.

Mr Polman said Unilever had “invested alot in training”, particularly a centre in Singapore.

He added: “We set high standards for ourselves. It [the reason for Unilever being targeted] is the combination of a successful business and investing in people. It makes them more attractive.”