Tesco's chief executive to step down after disappointing figures
July 22, 2014, 12:02 am TWN
LONDON--Britain's biggest retailer Tesco said Monday that chief executive Philip Clarke will step down in October, as the troubled supermarket giant warned that first-half sales and profits would miss expectations.
Clarke, who has been at the helm for three years, will be replaced by Unilever executive and turnaround specialist Dave Lewis, Tesco said in a statement, as the group struggles with what it described as "challenging" trade.
"Tesco plc announces that Dave Lewis will join the board of Tesco on 1 October, 2014 as chief executive officer in succession to Philip Clarke," the company said.
"Philip Clarke will continue as chief executive until that date when he will step down from the board but will continue to be available to support the transition until the end of January 2015."
Tesco faces fierce competition in Britain from German-owned discounters Aldi and Lidl, as well as from traditional supermarket rivals comprising Wal-Mart division Asda, Sainsbury's, Morrisons and Waitrose.
The group had revealed in June that it suffered its worst British sales performance for 40 years in the first quarter.
And in April, the group posted the second drop in annual profits in a row, hit by difficult trade in Europe and a costly investment plan that was aimed at turning around its domestic business in Britain.
"Current trading conditions are more challenging than we anticipated," Tesco added in a gloomy update on Monday.
"The overall market is weaker and, combined with the increasing investments we are making to improve the customer offer and to build long term loyalty, this means that sales and trading profit in the first half of the year are somewhat below expectations."
The group is battling weaker sales in main market Britain and launched a costly #1.0-billion investment program in April that was aimed at turning around its domestic business.
"Having guided Tesco through a substantial re-positioning in challenging markets, Philip Clarke agreed with the board that this is the appropriate moment to hand over to a new leader with fresh perspectives and a new profile," added group chairman Richard Broadbent on Monday.
"We are pleased to announce today the appointment of Dave Lewis, President, Personal Care at Unilever, as our chief executive."
Tesco is the world's third-biggest supermarket group after French rival Carrefour and with U.S. retailer Wal-Mart in first place.