Tesco’s finance director is set to resign as early as next week in a sign of further turmoil at Britain’s biggest retailer – just days before the supermarket is expected to announce another sharp decline in profitability.
Laurie McIlwee’s exit leaves Philip Clarke, chief executive, as the only executive director on Tesco’s board.
The departure comes as shares in Tesco are at their lowest level for almost 10 years against the backdrop of a price war in the supermarket sector. Analysts expect the group to announce a further 10 per cent fall in profits when it unveils its annual results on April 16.
It also comes at a delicate time for Mr Clarke, who took over from Sir Terry Leahy in 2011 in the biggest management transition at Tesco for 14 years. Last month he raised eyebrows when he acknowledged he might only be chief executive for “a few years”.
Once Britain’s most successful retailer, Tesco has in recent years struggled to deal with the threat of discount retailers and the rise of digital retailing.
Mr McIlwee became the focus of investor disquiet in October after Tesco shocked investors by failing to signal a collapse in central European profits. This prompted some institutions to question whether senior management were in full control of the group’s finances.
Mr McIlwee, who has been with Tesco for 15 years, the last five as finance director, also clashed with Mr Clarke over some areas of the company’s strategy, according to two people familiar with the situation.
However, some supporters said Mr McIlwee had steered Tesco’s finances through the downturn, cutting borrowings from £10bn in 2009 to £6.4bn in February 2013, and had also slashed capital expenditure.
Tesco declined to comment. Mr McIlwee could not be reached for comment.