Tesco's UK chief executive quits
- 15 March 2012
- From the section Business
The boss of Tesco's UK operation, Richard Brasher, is stepping down.
His departure, after only a year in the job, follows a disappointing Christmas sales period, a fall in market share and a profit warning in January.
The supermarket chain's group chief executive, Philip Clarke, will take on responsibility for the UK business.
Tesco has failed to revive sales despite spending £500m on price cuts and is now planning a major revamp of its stores.
In astatement, Mr Clarke said: "I have decided to assume responsibility as the CEO of our UK business at this very important time.
"I completely understand why Richard has decided to leave and want to thank him for the great contribution he has made over many years."
Robert Clark, an independent retail analyst, said: "Tesco has been underperforming for two or three years domestically.
"The Price Drop Campaign didn't cut the mustard and failed to address what competition was doing - nibbling away at segments of its market share."
Despite rapid expansion overseas, the UK is by far Tesco's most important market, generating two thirds of sales.
Asia is the second biggest market at 17%, closely followed by continental Europe at 16%.
The United States, where Tesco launched the Fresh and Easy chain in 2007, accounts for less than 1% of sales.
Because of the importance of the UK market, Tesco created the post of UK chief executive in 2010 for Mr Brasher.
But analysts say that a reported clash between Tesco's two top executives could have contributed to Mr Brasher's decision to go, a suggestion the company denies.
"It's reasonably well known that there were egos clashing in the business. Philip Clarke and Richard Brasher did not get on hugely well," said Bryan Roberts, a director at the consultancy, Kantar Retail.
"That, plus the failure of the Price Drop strategy made it a question of when, rather than if, Brasher would go."
Mr Clarke denied any differences between the two.
"I respect the decision that he's reached and I've nothing but the highest admiration for him," he said.
"The UK's been facing challenges that are long standing. This is a consequence of my wish to take a more active role in the day to day management and nothing else, and Richard recognising you can't have two captains in a team."
Tesco's market share slipped to 29.7% in February from 30.3% a year earlier.
Tesco shares plunged 16% on 12 January after the company issued its first profit warning in 20 years.
As a result, the company said it would build fewer giant stores and focus instead on its online business.
The company also plans to spend hundreds of millions of pounds revamping its existing stores over the next two years.
"Their store portfolio has become tired. They have not evolved enough recently. Customers want smarter and better laid-out stores and more attention to product detail," said Robert Clark.