Diageo Names Ex-Tesco Chief Dave Lewis as New CEO

Diageo, the world’s largest beverage firm, has appointed former Tesco chief, Sir Dave Lewis, as its new CEO. He will officially take on the role from January 1, following the resignation of Debra Crew after two years in leadership. The company seeks to address declining sales, despite a rise in Guinness demand.

Leadership Change Amid Sales Challenges

Sir Dave Lewis steps into this key position as Diageo contends with weak sales across major markets, particularly in the United States and China. In response to the announcement of his appointment, Diageo’s share price increased by 7% in early trading sessions.

Profile of Sir Dave Lewis

• Former CEO of Tesco from 2014 to 2020.
• Spent nearly 30 years at Unilever prior to his tenure at Tesco.
• Currently the chairman of health firm Haleon.

Diageo believes that Sir Dave’s extensive experience and leadership capabilities make him the right choice for the company at this critical time. He commented on the challenges ahead, emphasizing the need to harness opportunities in a tough market. “The market faces some headwinds but there are also significant opportunities,” he stated.

Financial Overview

Diageo recently reported a decline in operating profits to £3.2 billion for the year ending June, which is approximately 28% lower than the previous year. Net sales have also dropped by 0.1%, highlighting the tough conditions in the marketplace.

Current Market Conditions

The company anticipates flat to slightly declining net sales in the upcoming year due to a restrained consumer environment in the U.S. and reduced sales in China. Rising inflation is prompting shifts in consumer behavior, with many cutting back on alcohol consumption and dining out.

Expectations for Sir Dave Lewis

Market analysts recognize the urgency for Lewis to stabilize Diageo. According to Dan Coatsworth, head of markets at AJ Bell, “Dave Lewis needs to put Diageo back on track quickly.” He has a reputation for making decisive changes, earning him the nickname “Drastic Dave” during his time at Unilever.

As he transitions into this new role, Sir Dave will replace Nik Jhangiani, Diageo’s chief financial officer, who has been serving as the acting CEO since Crew’s departure in July. The focus will be on addressing immediate issues rather than pursuing long-term growth strategies.