Tesco’s New CEO Takes Over as Online Shopping Surges in U.K.

(Bloomberg) -- Tesco Plc's new chief executive officer reported a strong rise in first-half sales as more people bought groceries while working from home during the pandemic.

Tesco's like-for-likes sales in the U.K. and Ireland, its core market, rose 7.2% as people ate more at home than in cafes and restaurants. Tesco also slightly upgraded its outlook on retail profitability for the year, prompting the shares to surge as much as 5.1%.

Ken Murphy, a former executive of Walgreens Boots Alliance Inc., joins the grocer as Britain braces for the possibility of a no-deal Brexit in addition to a resurgence in coronavirus infections.

“My job is to keep momentum in the business and focus on delivering a great Christmas,” Murphy said on a call with journalists. “I am really happy with the strategy and direction of the company.”

Murphy has yet to detail his priorities for Tesco. Britain's grocery market is one of the world's most competitive and is experiencing a turbocharged increase in the number of people shopping online during the pandemic.

The company said retail profitability will be “at least the same level” this year as last year, compared with a previous estimate of “broadly unchanged.”

Murphy takes over from Dave Lewis, who left after five years. Lewis reshaped Tesco after an accounting scandal, selling operations in Asia and reducing debt while increasing the chain's price competitiveness in its home market to meet the challenge of German discounters Lidl and Aldi.

The new CEO has moved quickly to appoint a new chief financial officer, hiring Imran Nawaz from Tate & Lyle Plc, who will join next year, succeeding Alan Stewart.

Tesco shares rose 3.3% to 221.10 pence at 8:12 a.m. in London trading. They have dropped 13% this year.

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