Tesco Shares Soar on Philip Clarke Exit as Unilever's Dave Lewis Steps In

Tesco shares are leading the FTSE 100 in the opening session after the grocer revealed that its embattled chief executive, Philip Clarke, is stepping down this year.

The Tesco stock price rose by 2.8% to 292.80p within the first hour of trading after the group also confirmed that Unilever's chief of personal care, Dave Lewis, will take over from Clarke on 1 October.

"Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility," said Clarke, who replaced Sir Terry Leahy as CEO of the company in 2011.

Clarke has come under fire for the past year after the British supermarket giant posted falling sales for several consecutive quarters.

In June, Moody's ratings agency cut Tesco's credit rating to Baa2 from Baa1 which is only two notches above junk status.

Moody's blamed falling sales for a third consecutive quarter for the ratings cut as the retailer continues to lose market share to its rivals.

"We have downgraded Tesco's rating owing to the increasingly difficult conditions in the UK retail grocery market," said Sven Reinke, lead analyst for Tesco at Moody's.

"We expect these conditions to continue affecting the company's credit profile negatively over the next 12-18 months."

For the 12 weeks ending 24 May, Tesco's sales including VAT, but excluding petrol, were down by 3.7% on the same quarter as last year.