Tesco UK chief set to quit after only a year following poor results
Richard Brasher, chief executive of Tesco UK, is set to quit the grocery giant following a sustained period of under performance at its domestic business and after just a year in the role.
His expected decision to step down, which could be announced to the stock exchange today, also comes just two months after the group's first profits warning in 20 years and a botched £500m price-cutting campaign.
Mr Brasher was the architect of Tesco's Big Price Drop initiative, which was launched to a fanfare in September but failed to win over shoppers.
While he was promoted to the run the market leader's UK operation in March 2011, Mr Brasher has been on the board of Tesco since 2004 and at the company for more than 25 years.
The reported decision of Mr Brasher to quit later this year will pile the pressure on its group chief executive Philip Clarke, who took the helm at the same time 12 months ago, following the retirement of Sir Terry Leahy.
Mr Clarke, a Tesco lifer, has been hit by a series of high profile resignations at board level and questions have been raised about the company's strategy in the UK, where sales have lagged behind its big rivals Sainsbury's, Asda and Morrisons. Mr Clarke has admitted that mistakes were made communicating the Big Price Drop and that it had run its UK business "hot too long", referring to it not investing sufficiently in customer service, the store environment and its product offer.
Tesco did not return requests for comment on Mr Brasher last night. There remains the possibility Mr Brasher could remain at the company. Tesco suffered a 2.3 per cent fall in its underlying UK sales over the six weeks to 7 January. This forced the company to commit to invest up to £400m in its UK stores this financial year and forecast only "minimal" growth in profits in 2012-13. The almost-unprecedented profit warning wiped nearly £5bn off the market value of Tesco on 12 January. At that time, Mr Clarke strongly defended Mr Brasher and the hefty UK investment strategy. He said: "Richard and I see eye to eye completely on this."
While Tesco has operations in 13 countries overseas, its UK business remains hugely important and still accounts for more than two-thirds of the group's trading profits.
Despite it lacklustre UK performance, Tesco is still expected to have delivered profits of £3.6bn in the financial year just ended.
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