The boss of the UK's biggest supermarket, Tesco, is standing down in the autumn after the group issued another profits warning.
Philip Clarke's replacement as chief executive has been named as Dave Lewis, who leads Unilever's personal care business and was described by Tesco as "responsible for a number of business turnarounds".
The shock departure came as Tesco warned that sales and trading profits for the first half of the year would be lower than expected.
Tesco has been struggling in the face of fierce competition from discounters Aldi and Lidl, and last month reported its biggest-ever decline in sales in at least 20 years. City investors had lost faith in Clarke's ability to deliver a £1bn turnaround plan.
Tesco was the biggest riser on the FTSE100, up 2.6% by mid-morning, to 291p, despite the profits warning, reflecting City hopes for the new boss.
The supermarket group said trading conditions were more challenging than had been anticipated, and blamed a weak market and the cost of store improvements for a performance which it warned would be "somewhat below expectations".
Clarke is expected to walk away with £9.6m, according to pay advisory group Manifest. This includes his £1.1m salary and share awards, but does not cover his pension pot. Clarke will also continue to be paid his £1.1m salary for one year after his departure.
Tesco has cancelled a party for Clarke planned for Tuesday to celebrate 40 years at the supermarket chain. Clarke joined the supermarket as a schoolboy shelf-stacker in 1974 and became CEO in 2011.
Veteran retail analyst Nick Bubb pinned the blame on Clarke's predecessor, Sir Terry Leahy, whose 14-year reign at Tesco led to a disastrous venture in the US. "We've always thought that Phil Clarke was a street-fighter, and his inheritance from the once highly regarded Terry Leahy was very poor ... but he was always going to find it hard to survive another profit warning."
Recent industry data shows that Tesco appears to have lost more than 1m customer visits a week, worth £25m in sales, with its market share showing the biggest fall for at least 20 years.
Lewis becomes chief executive on 1 October, but Tesco said Clarke would be available until the end of January to help with the transition. Lewis will earn a salary of £1.25m, plus undisclosed Tesco shares and benefits which are likely to raise his pay far higher. He will also receive £525,000 in lieu of giving up his Unilever bonus.
The Tesco chairman, Sir Richard Broadbent, said Lewis was already known to many people inside Tesco, having worked with the supermarket "over many years in his roles at Unilever". He said Lewis would "sustain and improve" Tesco's position in the retail market.
Broadbent said the board was deeply grateful to Clarke. "Philip has done a huge amount to set a clear direction and reposition Tesco to meet the rapid changes taking place in the retail market. He has achieved a great deal across all areas of the business in the face of considerable pressures."
Clarke, who just six weeks ago said he had no plans to leave Tesco, said on Monday: "Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility and I am delighted that Dave Lewis has agreed to join us."
The departure of Clarke means that Tesco will go into the crucial Christmas trading period with two new people at the top.
The chief financial officer, Laurie McIlwee, is due to leave the supermarket in October, having announced his departure in April, following rumours of differences with Clarke. The supermarket has lured Alan Stewart of Marks & Spencer, with a £1.7m golden hello, to replace McIlwee.
Lewis, 49, has spent almost three decades at Unilever, where he has been UK chairman and president for the Americas. He is currently global president of personal care.
Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers, said the appointment of an outsider provided some hope, but added that the task of the new chief executive was sizeable. "The march of the discounters Aldi and Lidl continues, whilst Tesco's prior advantage in the form of its overseas operations is not what it once was. The question now will be whether the new chief executive will have the courage to take early aggressive action."
Shares in Tesco's rivals Morrisons and Sainsbury's fell on Monday, as investors took fright over the Tesco warning of a "weak" grocery market.
Original headline: Tesco boss Philip Clarke quits after another profit warning
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