Shakeup is the latest fallout from the retailer's first profit warning in 20 years in January
Tesco signalled that a major overhaul of its brand and image could be on the cards by putting its multimillion- pound advertising account up for grabs.
The troubled retailer said it was reviewing its brand communications – one of the most coveted accounts in advertising – a decision that could end its relationship with The Red Brick Road, the agency behind the longrunning "Tesco family" campaign, which features the actors Fay Ripley and Mark Addy.
The shakeup is the latest fallout from the retailer's first profit warning in 20 years in January, which was blamed on weak Christmas sales and the failure of its Big Price Drop marketing push to win over customers. Last month Tesco's boss, Philip Clarke, took charge of the day-to-day running of its UK stores, which led to the departure of its respected UK head Richard Brasher.
The company's investors are restive because the group's success hinges on the UK chain, which generates two-thirds of Tesco's near £68bn annual sales and £3.7bn profits.
Until recently Tesco could do no wrong in the eyes of its shareholders thanks to its consistently strong performance, but the profit alert changed all that.
At the weekend Richard Black, a fund manager at Legal & General Investment Management, Tesco's third-largest shareholder with a 4% stake, said Tesco "needs to think long and hard about what it wants to be".
Clarke said taking charge of the UK business would give him "greater focus" to oversee improvements in stores, insisting "very strong plans for improvement" were beginning to show progress.
Clarke, who succeeded the long-serving Sir Terry Leahy last year, is due to update the City with the company's full-year results on Wednesday. He is expected to put the brakes on opening big out-of-town stores and to spend hundreds of millions of pounds revamping existing shop outlets and improving its website.
Shore Capital analyst Clive Black said Clarke's priority must be to stabilise the performance of the UK chain. "Tesco UK needs to be interesting and fun, which leaves no place for arrogance and corporate deafness."
Tesco is one of the country's biggest advertisers, with a media spend of £140m in the 12 months to the end of February, according to Nielsen, the information and insights firm.
It has been with The Red Brick Road since 2006 when the veteran advertising executive Sir Frank Lowe convinced Tesco's then marketing director, Tim Mason, to follow him to the new venture. Over the years it has used celebrities including the Spice Girls, Noel Edmonds and John McEnroe to promote Tesco's latest offers.
"During the time we have worked with The Red Brick Road the way brands and consumers engage has changed and it seems to be a good opportunity for us both to step back and take a fresh look," said Tesco in a statement.
Mason, who has since been promoted to deputy group chief executive and heads up its loss-making US chain Fresh & Easy from California, has been a key figure in the development of the Tesco brand and some analysts say his marketing prowess is missed in the UK. He is credited with coming up with the "Every little helps" strapline in the mid-90s and was also behind the long-running 'Dotty' campaign, starring Prunella Scales.