Tesco’s UK boss pays price of festive failure

Long-serving director Richard Brasher took on the role of UK chief executive last March.

He has paid the price for Tesco’s worst Christmas trading performance for many years.

His role will be taken on by group chief executive Philip Clarke, who has promised to have a much closer involvement in the UK business.

Mr Clarke said: “This greater focus will allow me to oversee the improvements that are so important for customers.”

Tesco said Mr Brasher will leave the business in July once he has overseen the handover of responsibilities to Mr Clarke.

“He will leave behind a UK business which has very strong plans for improvement, and over the last two months these plans are beginning to show progress, in line with our expectations,” Mr Clarke added.

Mr Clarke told Reuters that Mr Brasher recognised “you can’t have two captains in a team”.

The Liverpudlian has admitted that Christmas had been disappointing after its Big Price Drop campaign flopped, prompting a near £5bn slump in its market value.

Tesco’s share of the sector has slipped from 30.3 per cent a year ago to 29.7 per cent in the 12 weeks to February 19, a level last seen in May 2005.

Mr Clarke has already revealed that he plans to cram a three-year overhaul into the next 12 months, including a raft of initiatives dealing with online, price and home delivery.

Mr Brasher was appointed to the board eight years ago, having joined Tesco in 1986.

He has held a number of marketing, commercial and store operations positions, before being appointed UK and Ireland boss in March 2011.

Independent retail analyst Nick Bubb said it was not a good sign for the business when the chief executive has to “micro manage” the UK operation.

He added: “Given the rumoured tensions between the two of them over the scale of the price cuts in the Price Drop, Mr Clarke ultimately had to back Mr Brasher or sack him, but the cracks are showing and it is hard to see how this will end happily.”

While Tesco shares were lower yesterday, Panmure Gordon analyst Philip Dorgan kept his buy rating and said he believed the UK business will recover.

He added: “Having a group chief executive and a chief executive of the UK is all very well when things are going swimmingly.

“However, with the UK 70 per cent of the business and underperforming, it becomes difficult to have two captains on the bridge. Therefore, the departure of Richard Brasher is a sad, but perhaps inevitable, consequence of the recent profit warning.”

Mr Clarke said Mr Brasher’s exit “categorically does not signal another warning.”

“There is no warning, if we felt that was necessary we’d be saying so and we don’t think it’s necessary.”

Mr Clarke also insisted he had not rowed with Mr Brasher, who was responsible for the Big Price Drop campaign launched last September. The campaign did not deliver the Christmas performance that Tesco had wanted.

So far, it has failed to stem market share losses to rivals Leeds-based Asda, Sainsbury and Bradford-based Morrisons.

Mr Clarke added: “I respect the decision that he’s reached and I’ve nothing but the highest admiration for him.”

Mr Clarke highlighted Mr Brasher’s contribution to the development of new store formats, the Clubcard loyalty scheme and international sourcing.

Mr Clarke added: “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.”

A programme to invest in existing and new stores and take on 20,000 staff in Britain had been fleshed out by Mr Clarke and Mr Brasher 10 days ago. Mr Brasher pulled out of an engagement to speak at the annual Retail Week conference yesterday morning.

Mr Clarke said in the long term it was in the best interests of the group to have a dedicated UK team with its own boss. “But right now I want a closer involvement and therefore I’m taking this decision.”

[email protected]