Tesco investors line up replacements for Clarke

Mr Lewis is president of personal care at Unilever, one of the biggest consumer goods groups in the world, whose brands include Dove soap, Lynx deodorant, and Persil. City sources said that other names in the frame include Tesco alumni Tim Mason and David Potts.

One top ten investor said: “There is not much confidence that the strategy is yielding much. I think there is pressure on the board to prove the results. They should be able to attract the very best managerial talent.”

Another top ten shareholder said Mr Clarke remains “unproven” as a chief executive. On Mr Browett, they said: “Clearly we know Browett. He has got the marketing flair for engaging with customers and employers. But turning around Dixons and revitalising Tesco are different challenges.”

The investor said that Mr Clarke is “not past his sell-by-date” but added: “The business is not performing as it should. Whether that is down to Phil or the management team beneath him we wait to see.”

One City analyst, who asked not to be named, said there were “four or five people in the frame” to succeed Mr Clarke, including Mr Browett and Mr Lewis, who has been at Unilever for 27 years and was previously chairman of Unilever in the UK and Ireland.

Although Tesco is expected to post disappointing annual results this week, Mr Clarke is unlikely to unveil a change in strategy in the UK.

In February Tesco said it would sacrifice its 5.2pc profit margin and invest £200m in lowering the price of key grocery products. However, shares in the supermarket retailer have fallen by another 16pc since then, wiping £4bn off the value of the company.

James Anstead, analyst at Barclays, said: “The key challenge for Tesco is to better convince the market that progress is being made with the core UK business and that this is resonating with customers.

“Sentiment is so low on the UK sector that the mere absence of new negatives may well count as a positive.”

Barclays has forecast that Tesco’s like-for-like sales fell by 2.6pc in the last three months in the UK, which would be the worst quarterly performance since Mr Clarke became chief executive in March 2011.

Mr Anstead said that Tesco is likely to hold its dividend and could announce a restructuring of its Turkish business. As well as battling against falling UK sales, Tesco is facing challenges in its overseas businesses. Sales in South Korea are falling due to restrictions on Sunday opening hours, while weak economies in Thailand and Eastern Europe are also dragging down Tesco.

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