Tesco has announced that Dave Lewis of Unilever will replace Philip Clarke as chief executive on 1 October 2014.

Clarke will continue in the role until that date and continue to offer support for the transition and also remain chairman of Tesco’s joint venture with CRE in China until the end of January 2015.

Lewis is currently president, personal care at Unilever and a non-executive director of Sky and will bring international consumer experience and expertise in change management, business strategy, brand management and customer development to the role.

A statement from Tesco said trading conditions are still ‘more challenged than anticipated’ at the time of its first quarter interim management statement on 4 June. The focus will remain on improving the customer offer and building long-term loyalty. The weaker market and continued investment means sales and trading profit in the first half of the year are ‘somewhat below expectations’.

Sir Richard Broadbent, chairman, said: “Having guided Tesco through a substantial re-positioning in challenging markets, Philip Clarke agreed with the board that this is the appropriate moment to hand over to a new leader with fresh perspectives and a new profile.”

Clarke said: “Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility and I am delighted that Dave Lewis has agreed to join us. Dave has worked with Tesco directly or indirectly over many years and is well-known within the business.”

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.