Tesco’s chief executive Philip Clarke is to leave the retailer and will be replaced by Unilever’s president of personal care Dave Lewis.
The retailer, which reported a six per cent drop in trading profit last quarter, has admitted that trading conditions have been more “challenging” than anticipated in its first-quarter interim results on 4 June, and revealed the changeover is due to a need for “fresh perspective” and a “new profile”.
Clarke, who has been at the helm since 2011, will hand over to Lewis on 1 October, but will remain available for support during the transition until the end of January 2015.
The retailer stated that the overall market is “weaker” than expected, and that sales and trading profit for the first half of the year are below expectations, having made investments elsewhere in the business to improve the customer offer and try and build long-term loyalty.
Tesco chairman Sir Richard Broadbent said the retailer is “deeply grateful” to Clarke for having served at the company for four decades, latterly as CEO.
"Having guided Tesco through a substantial repositioning 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.
“We are pleased to announce today the appointment of Dave Lewis, president, personal care at Unilever, as our chief executive from 1 October, 2014...
“Philip has done a huge amount to set a clear direction and re-position Tesco to meet the rapid changes taking place in the retail market. He has achieved a great deal across all areas of the business in the face of considerable pressures. The board are deeply grateful to Philip for his contribution to Tesco, over the last four decades, as well as more recently as chief executive. His has been an outstanding achievement.
“Dave Lewis brings a wealth of international consumer experience and expertise in change management, business strategy, brand management and customer development. He is already known to many people inside Tesco having worked with the business over many years in his roles at Unilever. The Board believes that with Dave’s leadership Tesco will sustain and improve its leading position in the retail market."
Clarke said now is the right time for the handover, adding: "Dave has worked with Tesco directly or indirectly over many years and is well-known within the business. I will do everything in my power to support him in taking the company forward through the next stage of its journey."
Lewis will receive a basic salary of £1.25m and standard benefits commensurate with his position. He will also receive a sum of £525,000 in lieu of his current year cash bonus from Unilever.
Clarke will also remain chairman of Tesco's joint venture with CRE in China until Lewis takes over.