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(Alliance News) - Gerry Murphy's board experience with a wealth of firms in the consumer space makes him a solid choice by Tesco PLC as the grocer's next chair.
Murphy is also currently chair of luxury fashion firm Burberry PLC and of sweetener and food ingredients supplier Tate & Lyle PLC. He will leave the latter post to ensure "sufficient capacity" for his chair role at Tesco.
Away from these posts, he was previously chief executive officer at B&Q owner Kingfisher PLC and fresh foods maker Greencore Group PLC. He has also sat on the board of Dunhill owner British American Tobacco PLC and Dettol disinfectant producer Reckitt Benckiser PLC.
"We welcome the appointment by the board of Tesco of Gerry Murphy as chairman. Irishman Murphy has had a high-quality career that embraces considerable elements of the UK consumer scene," analysts at Shore Capital Markets commented.
Murphy hailed the Tesco "business, management and board" left by his predecessor.
"John Allan, who left Tesco with great personal dissatisfaction at its spring 2023 AGM. Whilst so, Mr Murphy is correct in saying that he left him a fine executive team," Shore added.
Allan left the post of Tesco chair in June. The Guardian had reported that Allan, who had been chair since 2015, allegedly touched the bottom of a senior member of Tesco staff at the retailer's 2022 annual general meeting.
He was also accused of allegedly touching the bottom of a member of staff at the Confederation of British Industry business group during its annual dinner in 2019, where he was president from 2018 to 2020.
Tesco will draw upon on Murphy's expertise on consumer matters as the grocer continues to grapple with cost-of-living pressure.
In June, it said it was seeing signs that inflation is easing in the grocery market, however.
Tesco said revenue in the 13 weeks to May 27, its first quarter, rose 9.4% to GBP15.17 billion. The measure excludes both VAT and fuel, but includes Tesco Bank.
In the UK & Ireland alone, sales were up 9.5% to GBP13.79 billion. In Central Europe, they improved 7.9% to GBP1.04 billion. In the Booker wholesale arm, they increased 8.1% to GBP2.28 billion. Tesco Bank sales improved 14% to GBP334 million.
Chief Executive Ken Murphy said he was "conscious that many of our customers continue to face significant cost-of-living pressures".
interactive investor analyst Victoria Scholar commented: "Critics have argued that supermarkets and consumer goods giants have been 'profiteering' from food inflation as businesses pass on additional cost pressures to consumers in terms of higher prices. However, on Friday, Tesco cut prices for the second time in a number of weeks, lowering over 500 items in price in an attempt to attract customers amid the cost-of-living crisis and the increased price sensitivity among consumers. The goal is also for Tesco to preserve its dominant market share despite growing competition from the fiercely price competitive German discounters, Aldi and Lidl."
Aldi, now the fourth-largest UK grocer by market share, has continued to thrive in the current tricky environment for the UK consumer, according to the latest figures from Kantar.
The discount chain recorded a sales jump of 25% to GBP3.37 billion in the 12-week period to June 11. Its market share rose markedly to 10.2% from 9.0%, the fastest-growing UK grocer during the 12 weeks.
Lidl sales jumped 23%, meanwhile, with its market share spiking to 7.7% from 6.9%.
Tesco shares rose 1.0% to 250.90 pence each in London on Monday morning.
By Eric Cunha, Alliance News news editor
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