Tesco CEO Philip Clarke will be replaced by Unilever’s marketing lead Dave Lewis, the UK's biggest supermarket chain announced this morning.
Clarke's resignation comes as the company revealed its sales and trading profit are “somewhat below expectations”.
Tesco said its profits had suffered from“challenging” trading conditions combined with the retailer making investments to build on customer loyalty.
Profits dropped despite the UK retailer taking a digital-first attitude to retail earlier this year, as larger stores’ sales were affected by the growth of online grocery shopping.
In April, Clarke admitted that Tesco would “take some time” to start growing again following investments in automation, customer e-wallets and a new digital device.
He insisted he was “not going anywhere” and determined to “see through a fundamental reshaping of Tesco”.
Dave Lewis, Unilever’s president of personal care, will step up to the board in October this year.
What next for Clarke?
Clarke will be paid his current salary and benefits for six months while he transitions from CEO to a supporting role. After this he will receive one year’s wages, Tesco said.
Lewis will receive a £1.25 million-a-year salary plus benefits. He will receive a matched £525,000 bonus he was due from Unilever.
Clarke’s departure will be a blow for CIOs who saw his appointment as an important milestone for IT leads taking top roles in business.
A recent analysis of CEOs in the FTSE 350 suggested that career progression from CIO to the top is rare, despite the pivotal role technology plays in many businesses.
Out of the 350 CEOs, Clarke was the only former CIO to reach the very top.
The majority of CIOs are introverts and have a tendency to get bogged down in detail, which can result in them struggling in a leadership role, a recent study found.