Morrisons chief executive to leave after board runs out of patience

MORRISONS chief executive Dalton Philips is to leave after the board ran out of patience waiting for his innovations and £1bn price investment programme to deliver growth.

The Bradford-based retailer announced its latest set of underwhelming sales figures which, while less bad than previous the rest of 2014, left one retail analyst saying there was “still much work to do”.

That work will now be done by a new chief executive, under a new chairman – former Tesco finance director Andrew Higginson, whose appointment was announced last July and is now confirmed.

Mr Philips, who has been with Morrisons for five years, has been beset by difficulties, with Sir Ken Morrison among his more vocal critics.

The retailer has been squeezed by the growth of the discount supermarkets, principally Aldi and Lidl, and the way its Big Four competitors have increasingly focused on the value end of the market.

The crucial Christmas period offered little respite as sales for the six weeks to January 4 were down 3.1% on a like-for-like basis, excluding fuel. Although that is a marked improvement on the previous four quarters – when like-for-like sales fell between 5.7% and 7.6% – Morrisons’ board did not feel that growth would return quickly enough.

Mr Higginson, who will officially replace Sir Ian Gibson as chairman on January 22, said: “In the next chapter of Morrisons development, we need to return the business to growth. The board believes this is best done under new leadership.

“I would like to thank Dalton for his contribution as CEO.  He has brought great personal qualities and values to his leadership of the business, having had to manage against a background of considerable industry turmoil and change.

“He deserves particular credit for facing into and dealing with the pricing issues that have now become evident, for taking the business into the convenience and online channels, and for the steps he has taken to modernise the company’s operating systems.”

His replacement faces a difficult challenge, with problems on several fronts in addition to being in a sector which has been disrupted by the success of the discount retailers.

David Gray, retail analyst at Planet Retail, said: “This morning’s underwhelming, if improving, set of numbers shows there’s still much work to do for the beleaguered Bradford-based grocer. Representing one of the worst declines among the so-called UK Big Four over Christmas, Morrisons’ results are being impacted by the double-whammy of falling food volumes alongside stagnant food price inflation.

“The negative performance comes in the wake of a £1bn price investment programme – which was meant to be the company’s salvation.”

Mr Philips, who will continue in his role until the year-end results to ensure a smooth transition, said: “I’m sad to be leaving but when a board wants to make a change, you accept that and move on.”

He added: “Morrisons is a great company with exceptionally talented people and I have been very proud to have worked with them.  Over the last five years, we have made many improvements to the business and given Morrisons strong foundations for the future.”