Tesco UK chief executive resigns

After just a year in the job, Richard Brasher has quit as UK chief. Tesco group chief executive Philip Clarke, worried by flagging sales, has decided to roll up his sleeves and get stuck in.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
Brasher announced his resignation this morning. He has been under increasing pressure to reverse Tesco’s sliding fortunes in the UK, to no avail.

In January, Tesco released its first profit warning in 20 years. This followed poor sales at Christmas and a muted response to its £500m price-cutting campaign. Market share has also been slowly slipping from Tesco’s grasp, down to 29.7% in February from 30.3% a year earlier. Rivals Morrisons, Asda and Waitrose have all profited from Tesco’s domestic decline. Clarke is taking decisive action.

In a statement this morning, he said: ‘I have decided to assume responsibility as the chief executive of our UK business at this very important time. This greater focus will allow me to oversee the improvements that are so important for customers. I completely understand why Richard has decided to leave and want to thank him for the great contribution he has made over many years.’

It is believed that Brasher's departure follows a clash with Clarke over further price-cutting. The group chief refused to take another hit on profit and wanted a crack at a turnaround himself. Clarke’s reluctance to lose more margin is understandable – he’s already taking a huge risk by implementing a £457m recovery plan in the year to January 2013.

The cash will be spent on store refits and a massive ecommerce push to try and make Tesco the premier online supermarket. Unsurprisingly, Brasher has now pulled out of his speaking engagement at the Cloud Retail Week Conference this week where he was going to talk about the online expansion.

Clarke doesn’t seem to be making too many friends at board level in the supermarket giant. Since he succeeded Sir Terry Leahy at the helm a year ago, two other high-level execs - Andrew Higginson, head of Tesco’s retailing services and David Potts, the Tesco Asia boss - have both stepped down. Lucy Neville-Rolfe, legal and corporate affairs director, is also expected to leave this year. Of course when a new boss takes over, there is a natural tendency for those passed over to move on, but still...

Clarke is clearly a student of the 'if you want something done, you have to do it yourself' school, and perhaps he is right. But he needs to be careful, it’s very tempting for frustrated bosses to dive in whenever they see something they think they could do better themselves. Tempting but wrong – the job of the chief exec is to not to do everything themselves (because they can’t), but to make sure that everyone else does their jobs as well as they can be done. If he pulls it off this time it’ll be a job well done, but it’s a habit he really ought not to get into...

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