Financial News

  • 25 June 2014, 9:46

Top Tesco Executive Quits Ahead Of Key AGM

Another top executive at Tesco has resigned, casting renewed doubt on the efforts of the company's chief executive to transform the performance of Britain's biggest retailer.

Sky News has learnt that Neela Mukherjee, the UK general merchandise director, decided to quit following a reshuffle of Tesco's UK management team.

The news of her departure, which makes Ms Mukherjee the latest in a long line of senior managers to leave since Philip Clarke took over as Tesco chief executive in 2011, comes just three days ahead of what could be a stormy annual meeting for the supermarket giant.

Tesco has reported a string of dismal trading updates during the last two years, culminating in this month's announcement that like-for-like sales had fallen by 3.8% during the quarter to the end of May.

Mr Clarke said the performance was the worst he had known in his nearly 40 years with the company, intensifying the pressure on him to accelerate a turnaround plan.

Friday's annual meeting will also come in the wake of the first public criticism of Tesco's performance from Mr Clarke's predecessor, Sir Terry Leahy, who told Sky News recently that he was "disappointed" about the lack of progress.

Insiders said that proxy votes collected ahead of the AGM suggested that there would be overwhelming support for all of the key resolutions, including the re-election of its entire board, and on directors' remuneration.

Mr Clarke and senior colleagues have not been awarded bonuses in recent years, reflecting the malaise at Tesco, and he warned this month that he could not make "any promises about sales improving in the next few quarters".

The major grocery retailers are locked in a new price war, the need for which has been exacerbated by the success of discounters Aldi and Lidl.

This week, Morrisons, which is also struggling, said it was reducing prices further on dozens more 'everyday' products.

Ms Mukherjee's departure from Tesco was confirmed in a statement, which said: "Neela has decided to pursue her career outside of Tesco.

"She made a significant contribution in her 12 years at Tesco, both internationally and here in the UK."

Her exit underlines the extent of the managerial instability beneath Mr Clarke.

His latest reshuffle included promoting Robin Terrell, the group multichannel director, to take on responsibility for general merchandise, which includes electrical goods, homewares and stationery.

Ms Mukherjee had herself only been appointed to the role in November 2012 following stints in Tesco's online and Malaysian operations.

Tesco is in the process of recruiting a new chief financial officer to replace Laurie McIlwee, who is quitting after clashing with Mr Clarke.

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