Tesco ditches Clarke for Unilever chief Lewis after new profits warning
Around 8,000 workers in Northern Ireland have a new boss after Tesco ditched beleaguered chief executive Philip Clarke and recruited an outsider from consumer goods giant Unilever to try to restore its fortunes.
Shares in the UK's biggest supermarket rose 3% as the City cheered the announcement, which comes weeks after Mr Clarke (54) admitted that its latest sales performance was the worst in 40 years.
New boss Dave Lewis (49) takes over in October with a £1.25m basic salary and a £525,000 golden hello in lieu of his Unilever bonus.
The company is Northern Ireland's second biggest employer with around 8,700 staff and nearly 60 stores, including eight Extra stores.
It recently unveiled a £2.3m makeover for its Knockagoney Extra store in east Belfast.
A party due for today to celebrate Mr Clarke's four decades at the firm has been cancelled.
The announcement of his departure came as the supermarket warned that continuing pressure on the grocery market combined with the cost of investments meant that sales and trading profit for the first half would be "somewhat below expectations".
Tesco has been battling with intense competition from discount rivals Aldi and Lidl and a squeeze on household budgets.
The group highlighted the need for change by saying any improvements for the current 12-month period would be partly reliant on "steps that may be taken during the remainder of the year to improve our customer offer further".
Mr Clarke took over in March 2011. His predecessor, Sir Terry Leahy, had seen a transformation in Tesco's fortunes as profits surged during his 14 years in charge – though there have since been question marks over his legacy.
But at the start of 2012, Mr Clarke shocked the market with the group's first profits warning in 20 years. It prompted the launch of a £1bn turnaround plan but latest annual results showed annual earnings down for the second year in succession.
This was followed by like-for-like sales for the first quarter to May 24 falling by 3.7%, the third quarter in a row of worsening falls, and yesterday's profits warning.
Tesco chairman Sir Richard Broadbent said: "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."
Mr Clarke said: "Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility and I am delighted that Dave Lewis has agreed to join us."
The appointment of Mr Lewis brings to an end a tradition of long-serving insiders being given the top job at Tesco, with the job previously held by Sir Terry and before him Lord MacLaurin.
Mr Clarke, who worked his way up from the shop floor, will be replaced by Mr Lewis in October but will stay on in a support role until January, and receive a year's salary on departure.
Tesco said: "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."