Amazon has poached a long-serving senior Tesco executive to run its bricks-and-mortar retail operation, in the latest escalation of its attack on the high street.
The departure of Tony Hoggett was announced on Friday by chief executive Ken Murphy. Mr Hoggett joined Tesco in 1990, became group chief operating officer in 2018 and was promoted to a newly-created role of chief strategy and innovation officer in April.
At Amazon he will be senior vice president of physical stores, reporting to Dave Clark, the worldwide head of Amazon’s retail business. Mr Hoggett is among the best-known British retail figures to have joined the US powerhouse as it expands into groceries.
Amazon is poised to snatch Tesco’s crown as Britain’s biggest retailer within the next four years, according to a study last month from data firm Edge by Ascential. The US tech giant’s sales are predicted to hit £77bn by 2025, the study said, £1bn more than Tesco’s. In 2020, Amazon’s total UK sales were £36.3bn while Tesco’s were £64bn.
Mr Hoggett joins as the US e-commerce giant is expanding further into physical retail.
In March it opened its first physical grocery store in Britain, and the first outside of the US, in Ealing. The 25,000 sq ft space sells hundreds of own-label “By Amazon” products alongside established brands such as Morrisons and Booths.
Amazon now runs five stores in London that each rely on technology to allow consumers to pay without a physical checkout, with the Amazon app tracking purchases and billing shoppers’ accounts.
Amazon began offering free grocery delivery to millions of Prime members last summer, in a bid to challenge traditional grocers.
In 2017 it bought organic food chain Whole Foods Market, which runs seven UK stores, for $13.7bn (£10.7bn). UK grocers, meanwhile, have been grappling with an accelerated shift to online services amid the pandemic.
In the year to February Tesco posted a 77pc rise in online sales to £6.3bn to reach 1.5m weekly delivery slots, as it tapped into people staying at home during lockdown, boosting its delivery business. Covid-related costs, however, caused pre-tax profits through the year to drop by almost 20pc to £825m.
In a note to staff on Friday, Tesco boss Mr Murphy said a succession plan would begin in due course, adding: “Tony has made an incredibly valuable contribution over these years, and I wish him the very best for the future”.
Separately, Clayton Dubilier & Rice has been granted access to confidential information by Morrisons as it works on an improved offer for the supermarket chain, Bloomberg reported.
The US private equity firm made an initial offer for the retailer but was beaten by a £6.3bn bid from Fortress Investment Group.