Morrisons ousts boss after poor holiday season
BRITAIN’S embattled grocery sector claimed its first casualty of the year after Morrisons sacked its chief executive Dalton Philips following poor Christmas sales.
Shares climbed 4.5 per cent as the City welcomed the prospect of a new boss to revive the supermarket’s fortunes. Morrisons’ incoming chairman Andy Higginson said Philips has “had a good run” but it was time for a “fresh pair of eyes to try and regain some trading momentum”.
The former Tesco director said it will be looking outside the company for a new chief executive and “had cast the net wide” but added that given the tough environment “it was not a job for people with L-plates”.
Philips will stay on as chief executive until the end of year results in March. He is expected to get a pay-off equivalent to his annual salary of £850,000 but could earn more in share awards.
He said he was sad to be leaving “but when you get a tap on the shoulder and the board wants a change then you accept and you work with them”.
While widely liked in the industry, Philips’ departure was expected by analysts after five difficult years trying to turn the business around. The Bradford-based group has been particularly hard hit by the rise of the discounters, which have a strong presence in its northern heartland.
It was also slow to move into convenience and build a presence online, which it eventually gained last year through a costly tie-up with Ocado. In March last year, it launched a £1bn price offensive, the effects of which Philips said are starting to bear fruit.
Like-for-like sales at stores open over a year, excluding fuel, fell 3.1 per cent in the six weeks to 4 January, which was better than analysts had feared. Philips said sales grew by 0.7 per cent over the four-week Christmas period, putting it in second place among the big four supermarkets. “The Christmas trading statement shows an improving picture in a difficult environment after a 6.4 per cent like-for-like sales decline in the third quarter. We are driving volume in our business and like-for-likes per basket has continued to improve,” he said.
Morrisons also announced it will close 10 loss-making supermarkets accounting for £50m of sales and affecting 409 employees. “Unfortunately we cannot see a way of making these stores profitable,” Philips said, adding that it will look to re-employ as many staff as possible.