Richard Brasher, chief executive of Tesco’s UK operations, is to step down as Britain’s biggest retailer struggles to revive its domestic performance after its first profit warning in 20 years.

Tesco confirmed Mr Brasher’s departure on Thursday morning. Philip Clarke, group chief executive, will take over the running of the retailer’s domestic operations.

Mr Clarke said in a statement: “I have decided to assume responsibility as the chief executive of our UK business at this very important time. This greater focus will allow me to oversee the improvements that are so important for customers. I completely understand why Richard has decided to leave and want to thank him for the great contribution he has made over many years.“

Mr Brasher, a long-serving director at the company who has been UK chief for just a year, had been due to address a high-profile industry conference on Thursday.

His departure follows a profit warning in January after Tesco recorded its worst trading over the Christmas period for decades.

The move comes after reports of longstanding tensions between Mr Clarke and Mr Brasher. The pair were said to have clashed over Tesco’s flagship £500m price-cutting programme, which has failed to revive sales. Mr Brasher wanted to go further with the price cuts but this was resisted by Mr Clarke and Laurie McIlwee, finance director, who wanted to preserve profit.

In an interview with the Financial Times last week, Mr Clarke denied there were any tensions between himself and Mr Brasher.

Clive Black, analyst at Shore Capital, said the move “shows assertiveness by Clarke to take the bull by the horns, albeit the capability for him to be group chief executive and head of the UK is debatable”.

The management reshuffle comes amid early signs that a programme of aggressive voucher promotions has begun to stimulate sales growth.

Mr Brasher is the third Tesco board director to leave since Mr Clarke succeeded Sir Terry Leahy a year ago, in the biggest management transition at Tesco for 14 years.

Andrew Higginson, head of Tesco’s retailing services division that includes Tesco bank, and David Potts, the Tesco veteran running Asia, have both stepped down. Lucy Neville-Rolfe, legal and corporate affairs director, is also expected to step down this year.

The move comes as Mr Clarke puts the finishing touches to a recovery plan for the UK business that is expected to wipe out any profit growth this year.

JPMorgan Cazenove, joint broker to Tesco, forecast on Wednesday that Tesco could spend almost £800m revamping its UK stores over the next two years.

This programme will be paid for by cutting £300m-£350m from capital expenditure elsewhere. It also has £400m of proceeds from a property float in Thailand.

JPMorgan forecast that Mr Clarke’s recovery plan would hit profits by £457m in the year to January 2013. This included spending £172m hiring staff, but also a £120m hit to profit from a 1 per cent decline in UK like for like sales, and £135m spent on price cuts and promotions.

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