Tesco finance director steps down

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File photo dated 27/02/13 of Tesco's Chief Executive Philip Clarke who is facing a fresh blow amid reports the group's finance chief is poised to depart ahead of annual results in less than two weeks. PRESS ASSOCIATION Photo. Issue date: Friday April 4, 2014. Laurie McIlwee, who has been with the group for 14 years, is understood to be planning to hand in his resignation imminently following shareholder pressure and as speculation mounts over clashes with boss Mr Clarke over strategy. See PA story CITY Tesco. Photo credit should read: Rui Vieira/PA Wire

Tesco finance director Laurie McIlwee confirmed today he is to step down after 14 years at the group ahead of annual results in less than two weeks.

He admitted that Tesco faced a period of "unprecedented change" in the supermarket industry.

His resignation is a fresh blow to chief executive Philip Clarke after reports that Mr McIlwee had lost confidence in his boss's plans to turn around the faltering performance of Britain's biggest grocer.

Mr Clarke has launched a £1 billion overhaul of the supermarket but has yet to see it bear fruit, and annual results published on April 16 are expected to show a 10% slump in profits, according to analysts' forecasts.

It comes after the group reported its first annual profit fall in nearly 20 years last year.

Tesco and its major rivals Asda, Sainsbury's and Morrisons are seeing their market shares gnawed away by discounters Aldi and Lidl.

Morrisons chief executive Dalton Philips recently said it represented the biggest structural shift in the
grocery sector since the advent of supermarkets in the 1950s.

Mr McIlwee's move confirms reports overnight that his decision to depart was imminent, amid claims that he had come under pressure from investors.

He will remain in his post while the Tesco board begins a process to find a new finance director.

Chairman Sir Richard Broadbent paid tribute to his contribution, saying: "Laurie has played an important role in our process to transform Tesco and position it to be a winner in the new era of retailing."

Mr McIlwee said: "I am proud of what we have achieved at Tesco over the last few years. However, after 14 years at Tesco I feel that now is the right time for me to pursue new opportunities.

"I wish Philip and the team well and I am absolutely confident that Tesco will emerge from the current period of unprecedented change in the industry stronger than ever."

Chief executive Mr Clarke recently unveiled plans for £200 million of price cuts and another 150 convenience stores to halt sliding UK sales. Like-for-like sales fell 2.4% over Christmas.

Independent retail analyst Nick Bubb said: "It is perhaps more than a little unfair that Tesco finance director Laurie Mcllwee is to be the scapegoat for Tesco's profit weakness, but his communications skills seem to have left him vulnerable."

Mr McIlwee's exit will raise further questions over the overhaul being led by Mr Clarke, whose own future at the group has been the subject of speculation.

Mr Clarke's tenure has been fraught since he took over from Sir Terry Leahy in March 2011.

Mr McIlwee has been group finance chief since January 2009, but started with the group as UK finance director in 2000 before being appointed distribution director four years later.

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