Grocery Giant Tesco Sets Its Sights on Ocado

Ken Murphy, the new chief executive officer of Tesco Plc, finds Britain’s biggest grocer in much better shape than his predecessor did when he took charge. It has prospered during the pandemic, helped by its big out-of-town stores and the ability to ramp up online capacity much quicker than its more fashionable internet competitor Ocado Group Plc.

Taking the helm of a company in relatively decent health brings its own challenges. When Dave Lewis became CEO six years ago, he faced the worst crisis in Tesco’s 101-year history after an accounting black hole created a 250 million-pound ($323 million) profit shortfall. But it was obvious what he needed to do: Right the ship, strengthen the balance sheet and fight the increasing threat of German discounters Aldi and Lidl.

Murphy doesn’t have such a clearly defined emergency mission. Tesco is chugging along nicely, forecasting on Wednesday that this year’s retail operating profit from continuing operations would probably be at least as good as last year’s. That’s despite the 725 million-pound additional cost to

Tesco of managing the pandemic.

Pandemic Boost

Tesco's sales growth slowed slightly but is still the highest for at least eight years