If there was any doubt that Britain’s grocery industry is undergoing its most significant change for a generation, that was washed away by the changing of the guard at two of the Big Four supermarkets.

Andrew Higginson, formerly of Tesco, is to join Wm Morrison as chairman to attempt to get the Bradford-based supermarket back on track. But, even more significantly, Philip Clarke is leaving as chief executive of Tesco and will be replaced by Dave Lewis.

As has been widely reported, Lewis is from the world of consumer goods, not retailing. He has been poached from Unilever to revitalise Tesco’s broken brand, not to fiddle around the edges by launching new in-store cafés and restaurants, which was one of the major criticisms of his predecessor.

Higginson and Lewis are tasked with moving their supermarkets into the new era of grocery retailing — one where success is determined not by how many stores you have but the quality of your offer for local shoppers.

How Lewis, in particular, responds to this challenge will have repercussions for the entire retail and commercial property industries.

Tesco comprehensively won the previous era during the 1990s and early 2000s by building out-of-town supermarkets and convenience stores at a quicker pace than its rivals. As a result of the “space race”, Tesco grew its market share to a peak of 31.7% in 2007.

However, this success has ironically hamstrung Tesco for the new era. Tesco now has too much space. By trying to appeal to the broad customer base it built, Britain’s biggest retailer is vulnerable to smaller chains with a more niche and targeted offer.

Tesco used to be the only supermarket in a town, but now shoppers can choose from a host of online options as well as the fast-growing discounters Aldi and Lidl and the upmarket Waitrose. Its market share — which is equal to almost £1 in every £3 spent on groceries in Britain — is difficult to defend.

Clarke, the outgoing Tesco boss, has already called an end to the “space race”. This switch in Tesco’s strategy is clear from the latest grocery pipeline figures from CBRE. The amount of new supermarket space proposed for the UK — projects yet to secure planning permission — has fallen to the lowest level since September 2008.

Meanwhile, the amount of new space under construction fell 30% between September 2013 and March this year to 2.47m sq ft. However, the amount of space with planning consent to become a grocery store but not under construction is now 29.92m sq ft, up 14% on last year and more than double a decade ago.

With so much land and property still in the hands of supermarkets, how can this be described as the end of the “space race”?

Property will play a central part in Lewis’s plan for Tesco, despite the fall in new projects and his background in consumer goods.

He will have to decide what to do with the enormous landbank Tesco has amassed across the UK and its underperforming collection of out-of-town hypermarkets.

City analysts expect Lewis will “kitchen sink” Tesco’s financial results after taking over. This is likely to mean writing down the value of its unused land by hundreds of millions of pounds.

This opens up the tantalising possibility of the retailer unloading land to developers across the country as well as subletting underperforming space. Tesco has already started this process by writing down the value of its land by £800m last year and drawing up plans to build 4,000 homes.

Lewis’s nickname at Unilever was “Drastic Dave” and he has a reputation for tackling challenges such as this head-on. However, at the same time as coping with struggling large stores, he will consider whether to accelerate openings of Tesco’s prospering convenience store format Tesco Express.

Other retailers are continuing to open stores at a rapid pace, particularly Aldi and Lidl, who want to double in size over the next decade. Instead of battling over out-of-town sites, grocery chains are now fighting for convenience store locations and 10,000 sq ft stores.

In reality therefore, the “space race” continues. It is now as much about recycling underperforming and unused space as opening new shops, and that should present diverse opportunities for the property industry.

Graham Ruddick is retail correspondent at the Daily Telegraph