Sacked boss leaves Morrisons ‘with head held high’

Morrisons was the big loser over Christmas
Morrisons was the big loser over Christmas
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MORRISONS emerged the festive loser among the big four supermarkets following another tumble in Christmas sales.

The Bradford-based chain delivered the worst Christmas performance of Britain’s listed supermarkets for the second year running.

Like-for-like sales fell 3.1 per cent in the six weeks to January 4.

The figures were better than analysts’ average forecast for a 3.8 per cent fall after a third-quarter drop of 6.3 per cent, but Morrisons was up against easy comparatives last year when its Christmas sales fell 5.6 per cent .

Outgoing chief executive Dalton Philips said recent trading indicates that the turnaround plan announced last year is starting to pay off.

He said a key performance indicator measuring items per basket fell by just 0.2 per cent on a year earlier compared with a 2.4 per cent fall earlier in the year.

The decline in the number of transactions was also reduced.

“We came out of the third quarter at minus six and we’ve come out of this quarter at minus three. The performance is improving quite markedly,” said Mr Philips.

But it wasn’t enough to save his job as the retail sector claimed its first scalp of the year with analysts predicting that Marks & Spencer’s boss Marc Bolland, who was chief executive of Morrisons before Mr Philips, could be next.

The new chairman of Morrisons, Tesco veteran Andy Higginson, indicated there is unlikely to be any big change in strategy under the new chief executive.

He said the group’s first priority is to build on the “very good work that was launched in March”, when Mr Philips announced plans to spend £1bn on price cuts to take on the discounters.

“We need more customers coming through the doors, that’s the lifeblood of the business,” said Mr Higginson.

He added that there are no plans to dump Mr Philips’ ‘Fresh Format’ store revamp. The changes have proved popular with customers, placing the focus on fresh food, but it was criticised in some quarters for taking the retailer too “upmarket” with misted vegetables causing a particular controversy.

“There are no plans to change the strategy. Much will fall to the new chief executive,” said Mr Higginson.

Morrisons said there are no plans for an immediate dividend cut. The dividend will rise at least five per cent this year.

Morrisons kept its profit guidance for 2014-15 in the range of £335m to £365m.

The group said Mr Philips will stay in the role until year-end results in mid-March.

Mr Philips, whose strategy was lambasted by former boss Sir Ken Morrison at the firm’s annual meeting in June, said he would take time out before deciding on his next move.

“I’m obviously sad to leave,” he said.

“It’s a great company and it’s been a great five years. Five years is a long time.

“When the board wants a change, you just accept it. I’ve given my commitment that I will give what I gave before – 110 per cent.”

Outgoing chief insists the turnaround is paying off

Dalton Philips will leave Morrisons with his head held high after calmly accepting his sacking and vowing to carry on giving “110 per cent” to the business until he leaves.

At a time when many CEOs refuse to answer questions about their departure, let alone put themselves up for a press grilling, Mr Philips’ determination to see the job through to the end won admiration from across the retail sector.

Mr Philips was criticised for taking too long to take the group online and into convenience, but his decision to announce £1bn in price cuts is now seen as being ahead of its time.

His plan last night was to go for a very large beer. We wish him well.

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