Tesco Appoints New Chairman 'At Critical Moment'

Troubled supermarket Tesco has appointed John Allan as its new chairman, replacing Sir Richard Broadbent.

Mr Allan, who takes up his role on 1 March, is currently on the boards of electrical retailer Dixons Carphone and Royal Mail but will step down from those posts.

He said of the Tesco job: "I'm very pleased to be taking on this role at such a critical moment for the business and look forward to working with the new executive team and the board."

Mr Allan will be paid £650,000 a year as part of a three-year contract with Britain's biggest supermarket chain.

He is also chairman of property company Barratt Developments and payment processing firm Worldpay, but is expected to continue in those roles.

Sir Richard announced his resignation in October after a £263m accounting blunder involving rebates to suppliers.

The fall-out from the affair led to the suspension of eight executives, and a shake-up of Tesco's commercial practices that partly caused a £500m profit warning in December.

Tesco's sales have also been hit, with the company facing tough competition from discount stores like Aldi and Lidl.

Under Tesco's new chief executive Dave Lewis, the firm has cut jobs, introduced price reductions across hundreds of lines, and said it would close 43 loss-making stores.

It has also scrapped plans to build 49 more shops.

Last week, industry figures suggested Tesco had returned to sales growth for the first time in a year .

Statistics for the 12 weeks ending 1 February by Kantar Worldpanel showed a 0.3% increase in sales compared to the same period last year, with the chain attracting an additional 236,000 shoppers.

However, it was not all good news for Mr Lewis, who took over in September following the departure of Philip Clarke.

Despite the increase in sales, Tesco’s overall market share fell to 29%, down by 0.2 percentage points compared with last year as the effects of the supermarket price war continued to be felt.