Tesco chief Sir Terry Leahy to retire
Tesco has announced that chief executive Sir Terry Leahy is to retire from the supermarket chain next March.
Sir Terry has led the chain for more than 13 years and has overseen its rise to become the UK's leading supermarket.
He is to be replaced by international and IT director Philip Clarke, who said he was "honoured and delighted" to succeed Sir Terry.
Sir Terry, who earned £5.2m last year, said he would retain a large shareholding in Tesco.
He will be 55 years old when he retires.
Tesco shares slipped 2.3% in Tuesday trading.'Unrivalled contribution'
"When I became chief executive I had a plan to build Tesco around its customers, to make it number one in the UK and to find new long-term growth in non-food, in services and in international expansion," Sir Terry said.
End Quote Robert Peston BBC Business editor
Terry Leahy would be identified by most of his peers as the outstanding British public-company boss of his generation ”
"It has taken 14 years but that strategy has become a firm reality now and so I feel my work is almost complete."
He said he would concentrate on "private investment" after his retirement.
Tesco's chairman David Reid said that Sir Terry had made "an unrivalled contribution over a prolonged period. He is undoubtedly one of the leading businessmen of his generation".
Mr Clarke has worked for Tesco for many years and joined the board in 1998. He currently has responsibility for the supermarket's Asian and European operations, as well as for IT.
Collins Stewart analyst Greg Lawless said: "Phil Clarke is Tesco through and through. He's been running the international business well and was seen as one of the leading internal candidates."
Sir Terry's predecessor, Lord MacLaurin, also endorsed the appointment.
He told the BBC that Mr Clarke is "a strong candidate and will do an extremely good job for Tesco. He's not a flamboyant man, [but] he's a very good retailer."
(Story continues below)Bumper profits
Tesco has become far more than just a supermarket under the stewardship of Sir Terry. It now offers a wide range of services, including insurance, broadband internet, credit cards and Child Trust Funds.
Under Sir Terry, Tesco led the way in offering banking services and introducing the Clubcard, the store card that has been copied right across the High Street.
He has also overseen the store's expansion into Asia.
The company now employs almost half a million staff worldwide, with stores in China, the Czech Republic, Hungary, Japan, Malaysia, Poland, the Republic of Ireland, Slovakia, South Korea, Thailand, Turkey and the US.
The group employs 250,000 staff in the UK across almost 2,500 stores, and has a market share of about 30% of the grocery market, making it easily the UK's biggest supermarket chain.
In the year to the end of February, the company made a pre-tax profit of £3.2bn, 10% up on the previous year.Continue reading the main story
However, Tesco's growth under Sir Terry has been heavily criticised in some quarters.
For example, the Tescopoly Alliance, which counts the New Economics Foundation think-tank and Friends of the Earth among its members, argues that the proliferation of supermarket stores such as Tesco has put a number of independent retailers out of business.
It also argues that thousands of farmers have been forced under because of the low prices they receive for their goods due to the buying power of supermarkets such as Tesco.
Helen Rimmer, food campaigner at Friends of the Earth, told the BBC that Tesco was particularly aggressive in its planning applications, and that supermarkets not only put independent shops out of business, but "take money out of local economies".
Lord MacLaurin dismissed such accusations.
"Every other retail company has the same opportunities as Tesco, but Tesco has taken these opportunities," he said.
"Tesco offers a very good service to UK consumers... and our association with farmers has always been very good."