Tesco chief executive Dave Lewis is to step down next year, the supermarket giant has announced.
Chairman John Allan said he had accepted the decision “with regret” after Mr Lewis decided he wanted to leave in the summer of 2020.
The chief executive said his decision was a “personal one” and that it was “the right time to pass the baton” having completed a turnaround of Britain’s biggest supermarket.
He was described by one leading analyst as “the bloke that saved Tesco”.
Mr Lewis joined Tesco in 2014 as it suffered sliding sales and a series of profit warnings – and just weeks into the job had to deal with the fall-out as the company disclosed a big accounting black hole.
His announcement came as the supermarket’s half-year results showed sales once again under pressure over recent months.
Shares opened more than 2% lower though later recovered the lost ground.
Mr Lewis said: “My decision to step down as group CEO is a personal one.
“I believe that the tenure of the CEO should be a finite one and that now is the right time to pass the baton.
“Our turnaround is complete, we have delivered all the metrics we set for ourselves.”
Mr Allan said: “Dave has done an outstanding job in rebuilding Tesco since 2014 and he continues to have unwavering support from the board.
“Some time ago, however, he indicated to me that he was considering the best time to hand over to a successor.”
Ken Murphy, chief commercial officer at Walgreens Boots Alliance – the owner of high street retailer Boots – will take over next year.
The announcement of Mr Lewis’s departure came as Tesco reported a 6.7% rise in pre-tax profits to £494m for the six months to 24 August.
But like-for-like sales in the UK fell by 0.3% over the “subdued” half-year period – dragged down by a tough second quarter when they were 1% lower.
Tesco said it had suffered by comparison last year when demand was boosted by hot weather and the World Cup as well as a royal wedding.
Mr Lewis said it had been a “very good start to the year” despite “challenging external conditions”.
Tesco’s results came as latest figures from the British Retail Consortium (BRC) highlighted the pressure on profit margins in the sector as falling consumer demand pushes down prices.
The BRC found that shop prices fell by 0.6% in September and that while food prices were still going up, they recorded growth of just 1.1%, the lowest rate for a year and a half.
The supermarket has also swallowed up wholesaler Booker in a £4bn deal, announced a strategic alliance with French grocery giant Carrefour, sold off peripheral parts of the group such as video streaming service Blinkbox, and closed its headquarters in Cheshunt.
Clive Black, analyst at Shore Capital, said of Mr Lewis: “Put quite simply he is the bloke that saved Tesco, which should go down as an enormous achievement in British retail history.”