The supermarket chain is taking drastic measures to restore the company’s creditability after last week it emerged the multinational grocery disclosed that an estimate of first-half profit had been overstated by roughly £250 million, prompting shares in Britain’s biggest retailer to fall to an 11-year low. Tesco is facing an investigation by the Financial Conduct Authority over the profit shortfall in its accounts. At present four executives have been suspended pending further examinations, whilst Deloitte has been hired to investigate the cause of the shortfall.
Dave Lewis, Tesco’s new boss said in an email to staff “Turning our business around will require change in our culture, as well as in our processes and our brand proposition.”
In a bid to regain customer trust, the retailer board headed up by Sir Richard Broadbent, who is currently chairman of the company, has added a number of new non-executives to the board. Ikea’s ex-chief Mikael Ohlsson and Compass chief executive Richard Cousins will join the company with effect from November 1. “I am delighted to welcome Mikael and Richard to the board and know that their broad skills and experience will be a real asset to the company in the coming years,” said Tesco chairman Richard Broadbent.
“Mikael and Richard have been updated on and are wholly supportive of the steps being taken by the new management team to rebuild trust in Tesco and to focus all the resources of the business to deliver value to our customers.”
Prior to joining Compass in 2006, Richard worked for 15 years for BPB PLC, most recently as Group Chief Executive from 2000 to 2005, as well as a variety of roles including Corporate Planning and Business Development; Group Financial Controller; Managing Director, UK & US paper and packaging companies; and President of BPB Canada. Richard’s early career included roles at Cadbury Schweppes PLC and BTR PLC.
Mikael worked for 34 years for IKEA, carrying out a wide range of roles across the business, including as store manager, marketing manager for IKEA in Sweden, MD and Country Manager IKEA Belgium, MD and Country Manager IKEA Canada, Managing Director IKEA Sweden and Regional Retail Manager for Europe, Southern Europe and North America in combination with responsibility for Group Staff Retail, becoming CEO and President of the IKEA Group in 2009. Mikael was a member of the Executive Management Group of the IKEA Group from 1995 until 2013.
However merely a week after announcing the company overstated its profits by £250 million, as well as reshuffling staff executives in the last few days, new revelations show the famous British Grocer over 20 months ago ordered and purchased a private jet. Timing of its delivery will infuriate investigators as the grocer confirms to have taken delivery of the aircraft only a fortnight after the account scandal. Estimated to worth roughly £31 million the jet has certainly landed at a bad time.