Tesco replaces CEO as profit slides

Tesco replaced CEO Philip Clarke after first-half profit trailed expectations, the latest in a series of setbacks since the company veteran took the helm in 2011.

Dave Lewis, who as head of Unilever’s personal-care unit has led the expansion of the British-Dutch firm’s fastest-growing business, will succeed 54-year-old Clarke on October 1, the supermarket operator said.

Clarke is being replaced after struggling to stem the march of discounters Aldi and Lidl at one end of the UK grocery market, and upscale chains such as Waitrose at the other.

Since he started as CEO, Tesco’s domestic market share has declined to 28.9% from 30.2%. Sales have slid in most of its international businesses and current trading is “more challenging” than anticipated.

First-half sales and profit are “somewhat below expectations,” Tesco said.

Less than a year after Clarke succeeded Terry Leahy at the helm, Tesco cut profit guidance for the first time in 20 years following the failure of its Big Price Drop campaign.

Clarke has missed out on his annual bonus for two years running after failing to reverse falling profit. The outgoing CEO, who has spent most of his adult lifetime working at Tesco, pleaded for more time from shareholders at its June 27 annual meeting, saying the company is undergoing “radical” change.

Tesco chairman Richard Broadbent said the change in leadership is about building on the changes instituted by Clarke, which have included exiting the US after investing about £1bn (€1.26bn) there. The CEO also withdrew from Japan and folded the firms’s Chinese operations into a joint venture.