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Tesco boss says company needs culture change

Published 27/09/2014, 01:51
© Reuters Shopping trolleys are seen at a Tesco Express in southwest London
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LONDON (Reuters) - Tesco needs to make changes in the way it operates, its new boss told employees after a week which saw an accounting scandal at the British grocer wipe 3 billion pounds from its stock market value.

In an e-mail sent to staff on Friday, Chief Executive Dave Lewis said: "Turning our business around will require change in our culture, as well as in our processes and our brand proposition.

He added: "We want to work in a business which is open, transparent, fair and honest. We all expect Tesco to act with integrity and transparency at all times."

He called on Tesco staff "to pull together as a total Tesco team."

On Monday Tesco said it had overstated first-half profit by 250 million pounds - effectively its third profit warning in two months. It suspended four senior executives and launched an investigation, calling in forensic accountants and lawyers.

The overstatement related to the mis-booking of rebate payments from suppliers.

In the e-mail, Lewis said that due to the complexity of the investigation Tesco did not expect to be able to say much more on the issue before it publishes interim results on Oct. 23.

"This is a serious issue and we have seen an understandable reaction from the markets and the media this week," he said.

Lewis, who succeeded Phil Clarke on Sept. 1, said that despite the problems, Tesco has "been making progress."

© Reuters. File photograph shows the signage of a Tesco Extra store silhouetted against the sun in southwest London

"We're giving a sharper focus to the service we provide by investing in more hours in stores as we prepare for Christmas. You'll be seeing the results of this over the coming few days," he said.

(Reporting by James Davey; Editing by Leslie Adler)

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