Tesco replaces CEO Philip Clarke with Unilever’s Dave Lewis

Tesco’s chief executive Philip Clarke has paid the price for the supermarket’s poor sales and will be replaced by Unilever’s global personal care boss Dave Lewis in October. 

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The supermarket announced Clarke’s departure at the same time as warning the investment in “improving the customer offer” and building “long term loyalty” made in recent months means sales and profit for the first-half of 2014 will be “somewhat below expectations”.

Clarke, who took over from Sir Terry Leahy in 2010 and has been at Tesco for more than 40 years, has been under pressure from investors and analysts for the some time after the supermarket posted a string of negative sales returns – sales from stores open for a year or more fell 3 per cent in its latest quarter

Clarke responded by cutting prices in an attempt to mitigate the impact of discounters Aldi and Lidl who have been nibbling away at Tesco’s share and sales.

The investment in price, in digitising its Clubcard loyalty scheme and in improving its stores has yet to pay dividends, however.

In a statement, Tesco chairman Sir Richard Broadbent says: “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.”

Tesco says Lewis has been hired for his “wealth of international consumer experience and expertise in change management, business strategy, brand management and customer development.”

He has held a variety of senior marketing and executive roles at the FMCG giant since joining in 1987 most recently as global president of personal care overseeing brands such as Dove, Tresemme and Vaseline. The unit is its biggest, generating €4.2bn of Unilever’s €11.4bn turnover in the first quarter of 2014.

Previous roles include marketing director of some of the company’s biggest South American markets, managing director of the UK home and personal care business and chairman of Unilever UK and Ireland. He took up his current role in 2011.

Clive Black, analyst with Shore Capital described Lewis as a “first class executive”.

“We await Mr. Lewis’ prognosis for the business, particularly the UK, with considerable interest. We believe that his appointment will be greeted with a great sense of encouragement by a store staff that has been pummelled in recent years so leading to a collapse in morale.

“A material change in UK trading strategy cannot be dismissed, which is likely to have considerable implications for the rest of the British sector. Will Mr. Lewis keep Clubcard, Fuel Save, Price Promise and all of the other initiatives through which Tesco seeks to extol its value credentials to such poor recent effect?”

Lewis will receive a basic salary of £1.25m plus bonuses. 

Read Mark Ritson’s take on the appointment here.

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