Tesco brings in 'turnaround specialist' Dave Lewis of Unilever to replace Philip Clarke at the helm of the world's third-largest retailer. Big challenges lie ahead for the new boss. David Pollard reports.
It's a well-worn advertising slogan. Tesco has delivered on its promise - by dropping its boss. Chief exec Philip Clarke is a veteran of the supermarket group - spending four decades there. But his resignation came with a warning - the group predicting it'll miss its first-half profits - Clarke resigning after a disastrous three years at the helm. Chris Beauchamp of IG says there are big challenges ahead. SOUNDBITE (English) Chris Beauchamp, Market Analyst, IG, saying: ''As we know, turning around a company like Tesco takes time, and it takes effort, so today is the first step on what will be a very long road for the company.'' Top of the charge sheet against Clarke: that Tesco spent too much time and money on trying to break into overseas markets. Failed attempts to set out its store in the U.S. and Japan - together with troubles in China and Europe - distracted from its core UK market - where it still does over two-thirds of its business. Unilever executive Dave Lewis will take over from Clarke on October 1st. He's described as a 'turnaround specialist'. He'll need his experience, says Robert Cole of Reuters Breakingviews. SOUNDBITE (English) Robert Cole, Assistant Editor, Breakingviews, saying: ''One of the things it's got to do is to say to itself, are we going to be a UK business and concentrate on that, or are we going to do the international business as well, and are we going to restructure it if we take it all on. He also has to think about where the capital in the business is to be invested.'' And in a UK environment where Tesco is fighting a pitched battle for market share against other supermarket giants, that's not all. SOUNDBITE (English) Robert Cole, Assistant Editor, Breakingviews, saying: ''The other thing thing that he must do, it seems to me, is really get this debate going about how far does Tesco engage in this price war that we've heard about, you know. Does it have to take a really, really serious look at the price of things that it sells?'' Tesco is the third biggest retailer in the world - it employs over half a million people. During years of earnings growth, it was seen as the darling of the sector until a shock profits warning under Clarke's watch in 2012. Shares in the group have recently been trading at a 10-year low. But perked up around three per cent when the news was announced.