Tesco promotes Robbins, recalls Bush to help UK turnaround

Tesco Plc, Britain’s largest supermarket company, promoted a senior executive and called back the head of its Thai unit to help a turnaround at home after its share of the U.K. grocery market fell to a seven-year low.

U.K. Chief Operating Officer Bob Robbins will take on a global role under Chief Executive Officer Philip Clarke, which will include supporting U.K. CEO Richard Brasher, according to an internal memorandum seen by Bloomberg News. Chris Bush, a 29- year veteran of the Cheshunt, England-based retailer who has led the Thai business since 2010, will take over as U.K. COO.

The reshuffle provides additional support for Brasher as he seeks to improve the range and quality of products, and invests in better service and lower prices. Competitors are eating into Tesco’s domestic sales with promotions and fresh food offers. The retailer’s share of U.K. grocery spending dropped below 30 percent for the first time since 2005 this month, Kantar Worldpanel said yesterday.

“This is evidence of Tesco managing change,” said Nick Coulter, an analyst at Nomura with a “buy” recommendation on the stock. “The by-product is that the business also benefits from another heavy hitter coming back to the U.K.”

Robbins will work directly with Clarke on “strategic priorities” for the entire business, according to the memo. He will also strengthen support provided to the U.K. by playing a “leading role” in the U.K. investment program, it shows.

Share Sale:
“It signals Tesco’s intent to sort out the U.K. fast,” said Philip Dorgan, an analyst at Panmure Gordon.

Tesco rose as much as 1.4 percent in London trading and was up 1 percent at 322.65 pence at 11:38 a.m. The stock has fallen 20 percent this year, declining the most since at least 1988 on Jan. 12 after the company reported Christmas sales that missed analyst estimates and reined back profit expectations.

Tesco defended Robbins last month after disclosing that he sold 50,000 shares before it lowered the profit outlook, saying he wasn’t in possession of price-sensitive information.

Clarke has promised to focus on in-store labor, better products and improved service after conceding that Tesco’s Big Price Drop campaign, which cut the price of thousands of everyday items such as bread and milk, didn’t lure customers as much as the grocer expected. The retailer last month introduced advertising coupons for shoppers, where 5-pound vouchers are given for customers who spend 40 pounds or more, along with promotions such as 10 pence per liter discounts on fuel when they spend 60 pounds on groceries.

Thai Replacement:
“Last month, we set out our determination to invest in the U.K. business,” U.K. CEO Brasher said in a separate statement. “These changes give the U.K. board the combined strength of a very experienced leader of change and a talented country CEO who has done an extraordinary job in Thailand.”

John Christie, who heads Tesco’s business in Slovakia, will replace Bush in Thailand, according to the memo.

Source : Sarah Shannon – Bloomberg
www.businessweek.com/news/2012-02-01/tesco-promotes-robbins-recalls-bush-to-help-u-k-turnaround.html