Shares in supermarket giant Tesco are trading higher this afternoon following what has been described as the "astute" appointment of Irishman Gerry Murphy as group chairman.
The City veteran will replace John Allan, who stepped down in mid-June at the retailer's annual general meeting amid allegations of inappropriate behaviour. Mr Murphy, chairman of luxury fashion retailer Burberry and sugar company Tate & Lyle, will join Tesco on September 1 and will relinquish his role at Tate & Lyle at the same time.
The 69-year-old has also held senior executive positions at other high-profile consumer-oriented businesses such as B&Q owner Kingfisher, Carlton Communications, and convenience food group Greencore. As such, he is expected to ensure that Tesco stays on a steady course at a time when supermarkets are being accused of profiteering from the cost-of-living crisis.
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"We see this as an astute and good appointment by Tesco, one where regional dialects with his CEO, Ken Murphy, should not be a problem," analyst Clive Black of Shore Capital said. "We sense that Tesco's shareholders will also welcome the appointment."
Along with Mr Murphy's business credentials, Mr Black also noted the incoming chairman's "graciousness" towards his predecessor, Mr Allan, whom Mr Murphy credited for leaving Tesco "with its business, management and board in great shape and fit for the future".
Mr Black added: "Tesco is executing well, an assertion backed by our extensive store visits with pretty universally high standards and manifested in the group's good [first quarter] trading statement.
READ MORE: Tesco's profits slump to £1bn amid higher costs in 'tough year'
"No doubt the group and its shareholders would prefer to work in a UK where politicians and officials were of a higher capability and calibre, but such is life, it and we can dream. Mr Murphy should, to us though, underscore the good ship Tesco's stability, in which we wish him and his team good speed."
But Tesco's gain in the form of Mr Murphy marks a second significant loss for Tate & Lyle. Imran Nawaz, the supermarket group's highly-ranked chief financial officer, came to Tesco in April 2021 having previously held the same position at Tate & Lyle.
Shares in Tesco were 1.4% higher in late afternoon trading today as investors, along with Mr Black, appeared to relish the appointment of the new chairman.
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