Morrisons in crisis: Boss ousted and hundreds axed as shoppers flock to Aldi

Dalton Philips
Dalton Philips
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HUNDREDS of Morrisons jobs are to be axed in the North as the embattled group closes stores while a former director has accused the board of being unable to run “a school tuck shop”.

The job losses come amid warnings of the demise of the crisis-hit supermarket sector as shoppers flock to discounters Aldi and Lidl.

New data shows that all of the big four chains lost market share over Christmas, while sales leapt 23 per cent at Aldi and 15 per cent at Lidl.

More than half of British households visited Aldi or Lidl over the festive period, according to the latest Kantar data

Morrisons announced the departure of its chief executive Dalton Philips today alongside the news that it will close 10 loss-making stores this year with the loss of 409 jobs.

Incoming chairman Andy Higginson said that the bulk of the job cuts will be in the North.

Analysts said more closures are likely after the Bradford-based chain admitted that it has more than 10 loss-making stores.

The supermarket sector was also hit by the news today that Sainsbury’s is to axe 500 jobs as part of the latest round of cost-cutting in the supermarket industry.

The steps form part of the £500​m in cost savings outlined by the retailer in a strategic review published in November.

It has already announced plans to mothball a number of schemes in its property pipeline​.​

Last week, Tesco boss Dave Lewis announced plans for 43 store closures and the cancellation of 49 new stores in its pipeline as the industry comes to terms with a continued squeeze from discounters.

​Phil Dorrell, director of retail consultants Retail Remedy, said: ​“If other members of the big four supermarkets are the squeezed middle, Morrisons is being steamrollered flat.”

Following the news of Mr Philips’ departure today and the imminent departure of retiring chairman Sir Ian Gibson, former Morrisons property director Roger Owen told the Yorkshire Post that the non-executive directors have demonstrated “they are not capable of running a school tuck shop”.

Mr Owen called for a clear out of the board, which he said had presided over “a spiral of decline”.

Morrisons said it will look outside the company for a leader to return it to growth.

Its shares rose x per cent on hopes that a new boss could reverse its fortunes, but analysts said there was a mountain to climb as all of Britain’s big four grocers grapple with falling food price inflation and the rise of the fast-growing discounters.

Morrisons has been particularly hard hit because the discounters are strong in its northern heartlands and it was late to move into better performing parts of the market, namely convenience stores and online shopping.

Mr Philips dramatically changed tack to take on the discounters last March with a massive profit warning and plans to slash prices.

Many analysts believe Mr Higginson, who bought £500,000 worth of Morrisons shares today, could find a new chief executive from among his former Tesco colleagues.

Bookmaker Ladbrokes is listing former Tesco directors David Potts and John Browett as five to one while the punters’ favourite is Matthew Barnes, joint managing director of Aldi, at four to one.

Kiddicare lost strategic role within the group

WHEN DALTON Philips announced the acquisition of Kiddicare, the online baby goods retailer, it seemed to mark the start of a new era for Morrisons.

Britain’s fourth-biggest grocer bought Kiddicare for £70m in 2011, as it took its first steps towards building a business selling non-food goods over the inter-net.

In 2012, Kiddicare announced plans to open 10 new UK stores, creating up to 700 jobs, as part of a growth strategy under Morrisons’ ownership.

However, Kiddicare was about to face more testing times.

In March last year, Morrisons said that, following an agrement with Ocado and the launch of Morrisons.com, Kiddicare no longer had a strategic role within the group.

In July, Morrisons announced the sale of Kiddicare for £2m to Endless, the Leeds-based private equity firm.

Ten weeks later, Endless sold Kiddicare to online retailer Worldstores for an undisclosed sum.

During its brief period under Endless’s ownership, the number of Kiddicare stores was reduced from 11 to just one, and around 700 people were made redundant, as the private equity firm returned Kiddicare to its core operations.

By late September, the business had gone back to its original form; as an online business and a store in Peterborough.

At the time, a Morrisons spokesman declined to comment on the disposal.

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‘They couldn’t run a school tuck shop’: Former director calls for clearout at Morrisons board