Tesco's New CEO Aims for Global Growth

Thirteen years ago, then-new CEO Sir Terry Leahy had a vision for Tesco: to turn the supermarket into the undisputed U.K. leader, to expand internationally and boost non-food product sales.

Since then, Tesco's brand has expanded to include original films and (controversially) planned communities, and its global market exceeds 30%, puttng it a solid fourth after Wal-Mart (U.S.), Carrefour SA (France), and MetroAG (Germany).

So how will Leahy's just-announced resignation, which becomes effective in March, affect the brand's aggressive plans?

All eyes are watching Philip Clarke, Leahy's handpicked successor as CEO.

Clarke, a company "lifer", has overseen Tesco's international growth and its technology team. His global and digital savvy may make him a comfort to the board and shareholders, yet challenges abound.

Tesco faces tough competition in the U.K., especially now that Best Buy has launched a UK operation. In Best Buy's backyard, Tesco's U.S. Fresh and Easy retail chain has proved to be a money-losing brand extension.

Margaret Lawson, a manager at SVM Asset Management in Edinburgh, tells Bloomberg, "The new management is right for where the business is going, but we're worried about the headwinds in the U.K. The U.S. has not been a success. The concept is totally unproven and there are a lot of doubts."

Mike Dennis at MF Global Securities adds, "The current situation they are in [in America] is extremely difficult. It's not an easy time for Phil Clarke to take over."

Still, Tesco is financially strong. The company showed a 9.3% increase in net profit for its latest fiscal year with revenue growth of over 5%. Non-food sales rose over 6%. That should be a good springboard for continuing Leahy's legacy, and perhaps changing the brand for the better.

Despite the company's success, its core values "have been perceived at times harsh and commercially brutal," comments Daniel Dumoulin of Sundance London, a branding agency. "Now is the chance for the new face and voice to add more emotion, belief and humanity to the brand."

Indeed, it will be up to Phil Clarke and his team to (as the old song goes) accentuate the positives, not to mention overcome the negatives and keep Tesco moving down a profitable, more "human" and greener path.