The announcement of Philip Clarke’s pending departure from Tesco was melancholy for all concerned. It must be hoped his career is characterised by 40 years of great achievement with the company rather than the challenges of more recent times.

Clarke’s departure brings new leadership and new territory for Tesco. The new man, Dave Lewis - a Unilever ‘lifer’ - is not a Scouser, a retailer or a Tesco man. Accordingly, while the pedigree of Lewis cannot be questioned, there will be understandable musings by investors as to whether he can effectively jump from supplier to retailer. We sense this jump will test all of Lewis’s business acumen.

“Lewis must tackle an inappropriate value perception immediately”

Lewis starts his new job in Cheshunt in October. Quite how radical he needs to be remains to be seen. However, to our minds there is a standout priority and it needs to be addressed with pace: the core chain. Tesco UK is the heartbeat and backbone of the group. If the core chain doesn’t work - and it hasn’t for some time - then the group doesn’t progress, given nearly two thirds of profits are produced in the UK. Despite recent initiatives, from Giraffe to Fuel Save, Price Promise to Love Every Mouthful, same-store sales have been falling at an alarming rate, resulting in material loss of share.

Arresting this decline is essential for Tesco. The group’s scale, however, means there is no quick fix, and the strategy Lewis progresses will resonate around the whole industry. We feel he needs to address the issues of low staff morale, a complex customer proposition, a bloated cost base and an inappropriate value perception immediately.

Self-funded price cuts are expected by competitors, suppliers and investors. Additionally, we anticipate a material cost-cutting drive for a bloated, bureaucratic and complex regime. Trading margins, future investment plans, peripheral businesses and dividends may be under review too as the customer- - rightly and belatedly - comes to mind for management. We can also envisage material senior management adjustment in time.

Losing sight of the punter is costly and time-consuming. If this failure is finally addressed, then Tesco’s future may yet be brighter.

Dr Clive Black is a director at Shore Capital Stockbrokers