Tesco’s UK boss is believed to be on the verge of quitting the supermarket chain after just one year.
The expected departure of Richard Brasher, which may be confirmed this morning, comes as Britain’s largest retailer struggles with the tough conditions on the high street and increasingly fierce competition.
It is understood that Philip Clarke, the group chief executive, will assume responsibility for UK operations.
Mr Brasher has worked for Tesco for more than 25 years and has sat on its board since 2004. However, trading has been tough since he took charge last March, with Tesco forced into a shock profits warning in January that wiped £5 billion off the value of its shares.
The warning, its first in 20 years, was attributed to disappointing Christmas trading. Tesco had lost market share in a price war with rivals such as Sainsbury’s, WM Morrison and Asda. In response to tough competition Mr Brasher last year launched its “Big Price Drop” campaign. The company has also acknowledged that it needs to invest more money in its stores to attract consumers rather than chase growth in new markets overseas from California to China.
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News of the departure comes just a week after Tesco revealed plans to create 20,000 jobs in Britain over the next two years as part of its drive to invest in new and existing stores. It also comes before the company’s full-year results, due next month.
Yesterday analysts at JPMorgan Cazenove suggested that Tesco could spend as much as £800 million over the next two years revamping stores as it tries to revive sales in its home market, which still accounts for two thirds of its sales. The need for such heavy investment is likely to wipe out any profit growth this year.
Should Mr Clarke take on responsibility for the UK operations permanently, the move would mark a reversal of his decision to overhaul the management structure by introducing new regional chief executives and a UK management board.
Mr Clarke’s predecessor, Sir Terry Leahy, who ran the supermarket since 1997, was directly in charge of its UK division, with a separate international boss reporting into him.
Mr Brasher would become the latest senior executive to leave Tesco since Mr Clarke replaced Sir Terry, with David Potts, who ran its Asian business, and Andrew Higginson, who led the retailing services division that included Tesco Bank and Tesco Mobile, retiring.
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While the City was shocked at Tesco’s profit warning, not everyone was pessimistic about the supermarket chain’s prospects. Warren Buffett took advantage of the weak share prices to buy millions of its shares.
Tesco declined to comment.