Sir Ken Morrison has launched a powerful attack on the management of the supermarket chain he built up, criticising its leadership and lack of direction.
Speaking at Morrisons’ annual general meeting in Bradford yesterday, Sir Ken, who built the supermarket into the UK’s fourth-largest chain over 50 years before stepping down in 2008, criticised Dalton Philips’ presentation to more than 200 shareholders on the future of the company.
Mr Philips laid out six key areas for the grocer to focus on, including lower prices, fewer promotions, improving the store experience and introducing a Morrisons loyalty card.
Sir Ken said: “When I left work and started working as a hobby, I chose to fatten cattle and indoors I have something like 1,000 bullocks. Having listened to your presentation Dalton, I don’t wish to lower the tone of the meeting but I’ve got to give you the proper accolade and say you’ve got a lot more b******t than I have.”
Morrisons is attempting to fight back against the discounters by slashing prices permanently following a downward slide in sales, profits, market share and stock market value.
It recently entered the convenience and online retail sectors - years later than its competitors.
Morrisons crashed to a shock £176m loss in March after costs of £900m wiped out its annual profits.
Sir Ken said: “The results are described by the chairman and the CEO as disappointing. I personally thought they were disastrous.
“I warned in 2009 and 2012 that changes being implemented by the directors would seriously damage the business. I’m extremely sorry to admit that my comments, whilst unwelcome, were absolutely right and today we see the consequences.”
He said that the grocer lacked future direction and was losing market share, profit and sales. He said the company’s share price had been seriously damaged and the it had a much-reduced capital value while company borrowings had substantially increased.
He added: “We do need a rapid and sustained effort to return to being the best value operator on a low cost, well-controlled basis.
“Can the present management deliver this? I fear not. Of 13 major appointments made during the last four years only five remain. Something is wrong.
“You have recruited numerous good people of undoubted ability from various countries who all lacked experience of the retail food industry.
“A really first class business has been ruined by a lack of leadership from the top.”
Sir Ken also criticised the company’s spending attitude, particularly on ‘disastrous IT projects’.
He described the management style as “indecisive and confusing”, referring to “endless” changes in product range and label designs.
Dissecting the annual report, Sir Ken also asked a number of questions about the business and how it was progressing. Chairman Sir Ian Gibson said he would reply to Sir Ken by letter.