Tesco’s new chairman has valuable background

By Rod Addy contact

- Last updated on GMT

Allan is chairman of Dixons and was a director at supermarket chain Fine Fare
Allan is chairman of Dixons and was a director at supermarket chain Fine Fare

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Tesco’s new chairman John Allan’s background in retail, grocery and logistics will make him a great help to the retailer at this critical time, according to a leading industry analyst.

Shore Capital’s Darren Shirley said Allan had experience of grocery and non-food retail with supermarket chain Fine Fare, where he was a director from 1977 to 1985. He has also been chairman of Dixons since 2009.

Fine Fare, which opened its first shop in Brighton in 1956, was owned by Associated British Foods, but was sold to The Dee Corporation – subsequently known as Somerfield – in 1986. After the deal, all its stores were rebranded to Gateway or closed.

In addition, Shirley pointed to Allan’s understanding of non-food logistics in his position as ceo of Exel, which he held from 1994–2005.

‘Remarkable achievement’

“The turnaround in the performance and prospects of Dixons has been a remarkable achievement by its collective management, culminating in a well-regarded merger,” ​he said. “Allan's turnaround experience may be highly valuable to Tesco, and whilst not necessarily the centre of his time, he may have beneficial insights into logistics progress too.”

Shirley acknowledged Allan’s appointment “would raise an eyebrow or two with respect to who else was not appointed to the role of chairman”​.

Recent press speculation that former Asda boss Archie Norman could take on the role had raised the prospect of a ‘dream ticket’ partnership with Tesco ceo Dave Lewis, but this was not to be, said Shirley.

‘Worst of storm over’

However, he welcomed Allan’s appointment. “Allan joins Tesco at an interesting time, arguably joining the group after the worst of the storm is over; hopefully so. His appointment is welcome to our minds and we believe that he can contribute to the important job in hand of assembling a credible medium-term strategy and supporting shareholders’ interests.

“Allan's appointment comes on the back of the construction of a new group executive and senior UK management team. While it takes time, each day that goes by relieves the burdens on Lewis’s shoulders as the new team picks up the ball and runs.”

But Tesco’s recovery was likely to be slow, Shirley said. “We expect UK trading margins in particular to rebuild over time but not to recover to the 6% level ‘enjoyed’ in more recent times, maybe half this level is achievable in the foreseeable future.”

Related topics: People & Skills

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