Guinness maker appoints former Tesco chief Dave Lewis as new boss
A former Tesco boss has been appointed to the top job at Guinness owner Diageo as the world’s biggest drinks firm looks to turn around flagging sales.
Sir Dave Lewis will take over the beer giant on January 1 after former chief executive Debra Crew left in the summer after two years in charge.
The firm is struggling with weak sales across its range despite a rise in Guinness sales, and its shares have fallen to their lowest level in 10 years.
Diageo’s share price rose 7% in early trading following the announcement of Sir Dave’s appointment on Monday.
Diageo owns well-known brands such as Johnnie Walker whisky, Smirnoff vodka and Captain Morgan rum, but has seen sales decline in key markets, particularly the US and China.
Sir Dave was chief executive of Tesco for six years until 2020, and before that spent nearly 30 years at consumer goods giant Unilever. He will leave his current position as chairman of healthcare company Haleon.
Diageo said the board felt Sir Dave had extensive chief executive experience and proven leadership skills, and said “this is right for Diageo at this time”.
“The market faces some headwinds but there are also significant opportunities,” Sir Dave said.
“I look forward to working with the team to confront these challenges and realize some of the opportunities in a way that creates shareholder value.”
Diageo’s operating profit fell to £3.2 billion in the year to June; This is approximately 28% lower than the same period the previous year. He said there was “clearly a lot to do” in what he described as a challenging year, citing “pressure on consumers”.
Rising inflation has led people to cut back on their spending recently and consumers to cut back on drinking and eating out.
The company is also struggling with changing drinking habits among young people, who choose to drink less alcohol than previous generations.
“Dave Lewis needs to get Diageo back on track quickly,” AJ Bell market manager Dan Coatsworth said.
“His style is to listen closely to customers and suppliers and figure out what went wrong. The focus will be on repair work, not long-term growth.
“At Tesco, he walked away after saying he was done stabilizing the business, rather than standing there to take the business to the next level. One would imagine the same approach would apply to Diageo.”
Sir Dave will replace Diageo’s previous chief financial officer, Nik Jhangiani, who has been interim chief executive since Ms Crew resigned in July.
Mr. Jhangiani will return to his role as chief financial officer.
