Tesco chief exec under pressure

Published on: 14th April 2014

Tesco chief executive Philip Clarke is under increasing pressure ahead of results expected to show a slump in profits, amid reports his successor is already being lined up to replace him.Tesco-Logo-300

With the group continuing to lose market share to the discounters in its domestic market, analysts expect Tesco’s year end results on Wednesday to reveal that underlying pre-tax profits have fallen by up to 15% to around £3bn. Clarke is in the middle of a £1b turnaround plan launched after it posted its first fall in group profits in nearly two decades last year. However, with his strategy seemingly having little impact in halting the sales slide, investors are understood to have begun discussing potential successors for the CEO role.

Among those favoured by investors as replacements are thought to be former Dixons chief executive John Browett and the head of Unilever’s personal care business, Dave Lewis. Browett currently runs fashion chain Monsoon Accesorize but used to run Tesco’s online business. As president of personal care at Unilever, Lewis looks after brands including Dove soap and Persil washing powder. Other names being mentioned are former Tesco executives Tim Mason and David Potts, although analysts are divided on whether a replacement will be announced this week, with some saying that a quick appointment would help stem the flow of criticism.

Finance director Laurie McIlwee quit earlier this month, amid reports of disagreements with Clarke over Tesco’s way forward. Tesco’s last trading update revealed that like-for-like sales had fallen by 2.4% over the festive period, while Hargreaves Lansdown analyst Keith Bowman said a 2% decline was expected for the fourth quarter to February.

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