Departure is a chore for CEO who became an easy target
THE arrival of chairman-elect Andrew Higginson along with the absence of a Christmas sales miracle made Dalton Philips’ departure unsurprising.
The Morrisons chief executive had been under pressure for some time as the retailer continued to lose sales, market share, and support from shareholders.
Tesco’s troubles had helped to reduce some of the heat, but the appointment of its former finance director to the Morrisons board has resulted in Mr Philips heading to the checkout.
Last year he said: “You have to retain faith that in the end you will prevail while the whole time confronting the most brutal reality of the state you are in. Retailers need to face that brutal reality.”
For Mr Philips that reality has resulted in his defenestration, which he took typically phlegmatically. “I don’t have another job to go to,” he said. “My wife has given me a long list of chores to do.”
That might make him popular in the Philips’ household, but popularity is something he has found in increasingly short supply.
Morrisons’ share price, which had stayed between 250p and 330p for the first four years of his tenure, has been on the slide for 15 months.
From 295p in September 2013, it halved to 150p last October and despite a slight rally in recent weeks – last night’s close was 176p – its market value is more than £3bn below its 2011 peak.
Perhaps most damning was the market’s reaction to news of Mr Philips’ impending departure – up 11p, or 5%, to 188p within the first hour of trading.
No doubt the board’s decision will also please former chairman Sir Ken Morrison, who memorably skewered Mr Philips’ strategy at last year’s stormy AGM.
“I have something like 1,000 bullocks and, having listened to your presentation, Dalton, you’ve got a lot more bullsh*t than me,” said Sir Ken.
Even West Yorkshire rivals Asda saw Morrisons as an easy target, ridiculing its “desperate” voucher scheme.
Speaking in November, Barry Williams, Asda’ chief merchandising officer, said: “Our friends in Bradford have really pressed the voucher button. Mervyn King is alive and well in Bradford, undertaking quantitative easing.”
The failure of either the voucher scheme or its Match & More loyalty scheme to deliver the numbers that would have provided some momentum into 2015 means that Mr Philips will be concentrating on chores, once he leaves after the year-end results in March.
It’s not all bad news though. As Retail Remedy’s Phil Dorrell quipped:“Dalton Philips will be relieved not to face another bruising AGM”.
