Tesco announced yesterday that Terry Leahy will take over as chief executive of the supermarket group when Sir Ian MacLaurin retires in 1997.
Sir Ian had already said he would step down at the annual meeting that year and was anxious to ensure a smooth succession.
Mr Leahy, who is 39, will become one of the youngest chief executives of a FTSE-100 company, responsible for a business with annual sales of more than pounds 10bn. Long considered a high flyer within the company, Mr Leahy was picked out as a likely heir a couple of years ago.
He joined the company in 1979 and was appointed marketing director in 1992. His position as Sir Ian's likely successor was confirmed in February, when he was appointed deputy managing director.
Mr Leahy was widely credited for the launch of the highly successful Club Card loyalty scheme, which has already signed up 7 million members. The card has helped Tesco to overtake Sainsbury as Britain's largest grocer.
Softly spoken, with a trace of a Liverpool accent, he is a keen football supporter with a strong allegiance to Everton.
Commenting on the announcement, Sir Ian said: "He's got a very good retail sense, is a good marketer and has strategic vision. He is also a very good motivator of people."
On his successor's youth, he said: "I've always thought this was a young person's business."
Mr Leahy's impending appointment was popular in the City, where he is regarded as a retail "hot-shot". Tony MacNeary, retail food analyst at Nat West Securities, said: "Terry has proved himself well and the company has handled the succession admirably. But the real test will be the strength of the rest of the board he has around him."
As part of the reshuffle, David Malpas, joint managing director, will retire early next year. John Gardiner will take on Sir Ian's role as chairman on a part-time basis. Finance director David Reid will assume the additional role of deputy chairman and is widely tipped to succeed to the chairmanship after two or three years.
However, some analysts feel that the company might opt for an outside appointment with more international experience as Tesco's business becomes more diverse.
Analysts were yesterday drawing comparisons between Tesco's smooth handling of its succession question and that atSainsbury. Tom Vyner, Sainsbury's influential deputy chairman is due to retire in early 1997 but there has been no news on a successor. The company has an older board than Tesco but has been making some moves to bring in fresh blood, including the appointment of Kevin McCarten, 38, to replace Ivor Hunt as marketing director. Mr McCarten is trading director of Woolworths, part of the Kingfisher group.Reuse content