Clarke announced his intention to quit after the latest results requested trading conditions were “more challenging” than Tesco had anticipated at the time of its first quarter interim management statement on June 4.
A weaker market, combined with increasing investments meant sales and trading profit in the first half of the year were below expectations, Tesco said.
Clarke, who began his career with Tesco as a shelf stacker while at school, said it felt like the right moment to hand over responsibility of the business.
He will be replaced by Unilever’s head of personal care Dave Lewis.
Lewis will receive a basic salary of £1.25M and standard benefits commensurate with his position. He will receive a sum of £525,000 in lieu of his current year cash bonus from Unilever.
Tesco non-executive chairman, Sir Richard Broadbent, said Clarke had done a “huge amount” to re-position Tesco to meet the rapid changes in the retail market during his time with the business.
“He has achieved a great deal across all areas of the business in the face of considerable pressures,” he added. “Lewis brings a wealth of international consumer experience and expertise in change management, business strategy, brand management and customer development.
"He is already known to many people inside Tesco having worked with the business over many years in his roles at Unilever.”