Tesco announces departure of UK operations boss
LONDON—Britain’s biggest retailer Tesco said Thursday that the head of its domestic operations has quit after just one year in the job, following poor Christmas results and a profits warning.
The supermarket chain said in a statement that Richard Brasher will step down, leaving the company within months, and that group chief executive Philip Clarke would assume responsibility for its British operations.
“Tesco plc announces today that Richard Brasher has decided to step down from the board with immediate effect and to leave the company in July once he has effected a smooth transition of the UK business to Philip,” it said.
In January, Tesco posted poor sales over the key Christmas trading period and warned that its annual profits growth would be toward the lower end of market expectations owing to “challenging” conditions at home and abroad.
Tesco, the world’s third-largest retailer after US-based Wal-Mart and France’s Carrefour, failed to revive British sales despite a “Big Price Drop” promotional campaign and has also lost market share to rival supermarkets.
“I have decided to assume responsibility as the CEO of our UK business at this very important time,” added Clarke in Thursday’s statement.
“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.
“The depth of management at Tesco and the strong leadership team across the group allow me to take a more active role in the UK whilst our other businesses continue to grow,” Clarke said.
Tesco shares slid 0.97 percent to 321.8 pence, however, as investors remained unconvinced. London’s FTSE 100 index, on which the stock is listed, dipped 0.06 percent to 5,941.83 points.
“Seeing Richard Brasher leaving may appease some investors as he was one of the key figures of the Big Price Drop campaign that turned out to be very disappointing and led to the profit warning,” said Atif Latif, director of trading at Guardian Stockbrokers in London.
“He’d been with the group for circa 25 years; it shows they will make bold decisions to turn around fortunes. Tesco cannot afford to have another poor set of results.”
Hargreaves Lansdown equities analyst Richard Hunter added: “Any changes at senior level tend to be unsettling, but it nonetheless shows that Tesco continues to take its January profit warning very seriously.”
Earlier this month, Tesco said it would create 20,000 jobs in Britain by 2013, a move aimed at turning around its fortunes, improving customer service and helping to tackle high youth unemployment.
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