Always nice to know when you're not wanted, eh? Tesco announced this morning that CEO Philip Clarke will step down at the end of the year. It's not exactly a secret that the last few years have been pretty dire for Tesco - and with half the management stepping down, Clarke was rapidly running out of people to blame for the tough trading conditions.
Here's what has happened to share prices over the past five days (that spike is when Tesco announced Clarke's departure. Hashtag awkward...):
Source: Yahoo finance
Replacing Clarke will be Dave Lewis, current 'global president, personal care' at Unilever (so at least he'll smell fresh). Lewis has been 'responsible for a number of business turnarounds', says this morning's statement to the stock exchange, which is presumably the significant bit. Although it's worth pointing out that supermarkets are a very different beast to deodorants: investors' new-found confidence in the supermarket may be short-lived.
The company's high hopes for Lewis seem to be reflected in his salary: it's £1.25m, up from Clarke's £1.17m, plus £525,000 'in lieu of his current year cash bonus from Unilever' (which will presumably go down with shareholders like a house on fire). Lewis will join the board in October, before taking over the reins properly at the beginning of January.
To say it's been a difficult few years since Clarke joined in 2011 is an understatement. During his tenure as chief executive, discounters Aldi and Lidl have grown their market shares to 4.7% and 3.6% respectively. Alright, so that's against Tesco's 29% - but shareholders are disproportionately worried about their impact on the supermarket's business. Particularly when Clarke's main strategy to beat them seems to be to invite John Humphrys round to look at the parma ham.
Perhaps with that in mind, the supermarket didn't seem to want to give Clarke much space in this morning's statement.
'Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility,' he said, before going on about how 'delighted' he is Lewis is joining Tesco. Hmm.
Clarke 'agreed with the board that this is the moment to hand over to a new leader with fresh perspectives and a new profile', added chairman Sir Richard Broadbent, rather pointedly. Is it us, or is not much love lost there...?
'Current trading conditions are more challenging than we anticipated,' the supermarket added, referencing ita dire first quarter results, where it posted a 3.8% fall in sales. 'The overall market is weaker and, combined with the increasing investments we are making to improve customer loyalty, this means that sales and trading profit in the first half of the year are somewhat below expectations.' Let's hope Lewis ('call me Dave?') can finally be the one to beat the discounters. Or this may be the last straw for shareholders.