Tesco chief under pressure amid falling profits
14 Apr 2014
Tesco chief executive Philip Clarke is expected to come under increasing pressure with results expected to show falling profits, and reports of his successor emerging.
As the group continued to lose market share to the discounters in its domestic market, analysts expect the retailer's year end results on Wednesday to reveal that underlying pre-tax profits were down by up to 15 per cent to around £3 billion.
Clarke is trying to steer the retailer around with a £1-billion turnaround plan launched after the company posted its first fall in group profits in nearly two decades last year.
However, with his strategy not seen to be effective in halting the sales slide, investors are understood to have started discussion on potential successors for the CEO role.
Investors are said to be pushing for former Dixons chief executive John Browett or the head of Unilever's personal care business, Dave Lewis, as replacements.
Browett who currently runs fashion chain Monsoon Accesorize earlier used to run Tesco's online business, while Lewis looks after huge brands including Dove soap and Persil washing powder, as president of personal care at Unilever.
According to commentators Tesco would reveal a second year in a row of slumping profits on Wednesday, adding to pressure on Clarke.
They add the squeeze on the UK's established supermarkets would be highlighted this week when the sector's biggest player reported another decline in annual profits.
According to latest industry figures the UK's biggest supermarket saw its market share fall to 28.6 per cent in the 12 weeks to 31 March, from 29.7 per cent a year earlier.
According to analysts' expectations, underlying pre-tax profits at the group would shrink by 15 per cent to around £3 billion for the full year.
Tesco had been retrenching from loss-making international businesses to focus recovery efforts on the UK, where it was in the process of scrapping over 100 major store developments and focusing growth on convenience stores and online.
It also planned to transform stores into family-friendly retail destinations with the addition of the Giraffe restaurant chain alongside larger stores.
It emerged last week that finance director Laurie McIlwee would step down after 14 years at Tesco as report swirled that he had lost faith in his boss's strategy to turn around the company's performance.
McIlwee who said he would stay on until a successor was found, warned that Tesco faced a period of ''unprecedented change'' in the supermarket industry.
