UK boss of Tesco pays price for poor trading
THE UK boss of supermarket giant Tesco is to step down as the group bids to revive its domestic fortunes following a disastrous winter, it emerged today.
Long-serving director Richard Brasher, who took up his current role only last March, will leave later this year, paying the price for Tesco’s worst Christmas trading performance for many years.
His role will be taken on by group chief executive Philip Clarke, who has pledged a much closer involvement in the UK business.
Mr Clarke said: “This greater focus will allow me to oversee the improvements that are so important for customers.”
Tesco said Mr Brasher will leave the business in July once he has overseen the handover of responsibilities to Mr Clarke.
“He will leave behind a UK business which has very strong plans for improvement, and over the last two months these plans are beginning to show progress, in line with our expectations,” Mr Clarke added.
Mr Clarke admitted earlier this year that Christmas had been disappointing for Tesco after its Big Price Drop campaign flopped, prompting a near �5 billion slump in its market value.
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Tesco’s share of the sector has slipped from 30.3% a year ago to 29.7% in the 12 weeks to February 19, a level last seen in May 2005.
Mr Clarke has already revealed he plans to cram a three-year overhaul into the next 12 months, including a raft of initiatives dealing with online, price and home delivery.
Mr Brasher was appointed to the board eight years ago, having joined Tesco in 1986. He has held a number of marketing, commercial and store operations positions, before being appointed UK and Ireland boss in March 2011.
Independent retail analyst Nick Bubb said it was not a good sign for the business when the chief executive has to “micro manage” the UK operation.
He added: “Given the rumoured tensions between the two of them over the scale of the price cuts in the Price Drop, Mr Clarke ultimately had to back Mr Brasher or sack him, but the cracks are showing and it is hard to see how this will end happily.”
But Panmure Gordon analyst Philip Dorgan kept his buy rating and said he believed the UK business will recover. He added: “Having a group chief executive and a chief executive of the UK is all very well when things are going swimmingly. “However, with the UK 70% of the business and underperforming, it becomes difficult to have two captains on the bridge. Therefore, the departure of Richard Brasher is a sad, but perhaps inevitable, consequence of the recent profit warning.”