Sir Ken welcomes chief officer with hopes for a successful year

Speaking at the Bradford company's annual general meeting, Sir Ken said he was "not too disappointed" at the departure of Marc Bolland who "patently was not a retailer."

The people who did the hard work making a success of the Safeway takeover were overlooked and "never got the credit for it", he added.

Sir Ken said he was disappointed at the timing of Mr Bolland's departure – six weeks before Christmas – which presented problems for the company, but the business managed to overcome the challenges.

On financial performance, Morrisons' second biggest shareholder said: "Last year was good. We hope next year is going to be as good."

He also paid tribute to Dalton Philips, 41, who joined from Canadian retailer Loblaw earlier this year, describing him as "the new golden boy". The pair have visited Morrisons supermarkets and rival stores together.

Sir Ken said: "I have had the pleasure of spending time with Dalton. I think very optimistically about the future of the business when I look at him. He's a good family fellow. He's settled in York. I think he's going to be around for quite a long time."

In his first public comments as new CEO, Mr Philips said he has spent the last two months visiting stores and speaking to managers about the business.

He said: "I have had the opportunity to travel to many countries and work in different environments and I would say our store managers and in-store processes are some of the finest in the world."

Speaking about his plans for Morrisons, he said: "Tomorrow has to be better than today, that's my job. It's a great company. Can we do it better? We have great people and great values, but we still have some stuff to do. That's what I will be looking at."

The supermarket enjoyed "a vintage year" in 2009, posting a 21 per cent rise in underlying pre-tax profits to 767m, but City analysts expect Morrisons to come up with a new strategy to continue its strong growth.

Leeds-based rival Asda is targeting expansion through smaller stores acquired from Netto.

Asked by a shareholder about Morrisons' view on smaller stores, chairman Sir Ian Gibson revealed that the issue is "right at the forefront" of thinking among the executive team and main board. He said the group has had "a very successful" experience of trading smaller stores acquired from Co-op last year, although smaller stores are generally more expensive to operate per customer.

Sir Ian added: "We are learning what's the right size and right way to operate particular sizes that enables us to take our proper share of that particular customer base but still profitably for us as a business."

Asked how Morrisons could compete with Tesco, Sir Ian said the group planned to expand its geographical coverage by around 60 stores a year, but he doubted whether that would close the gap with the market leader.

Another shareholder warned the board against too much expansion into non-foods at risk of "becoming another Tescopoly", which could turn the public against Morrisons.

Sir Ian said the group liked non-food items such as kitchen wares and soft furnishings because they tend to be higher margin and non-perishable, leading to less waste and mark downs.

"But we are primarily a food retailer and within that primarily a fresh food retailer," he added. "There's little point in making this business a mini-Tesco."

Faced with a question about plastic bags, he said Morrisons had made "satisfactory" progress in their reduction, through customer education and the introduction of long-life bags.

All resolutions were passed.

Persistent shareholder's demand

Small shareholder Mohammed Jamil travelled from London to Bradford's Hilmore House for the annual general meeting; his fourth and the company's 70th.

Clutching a Morrisons bag-for-life, he asked Dalton Philips if he would promise to stay for five years.

"I hope it's more than five years," he replied. Mr Jamil persisted; would he promise? "If you will have me," said Mr Philips. "I want to be."

The tall, slim Irishman introduced himself to the 181 shareholders and guests who attended the meeting.

He was raised on a poultry farm south of Dublin. One of its customers was Morrisons. Directing his remark towards Sir Ken Morrison, Mr Philips said the farm "got squeezed quite hard in the Eighties", drawing a laugh from the audience.

He left Ireland at the end of the Eighties because there were no jobs, leading to a succession of increasingly successful retail roles.

Mr Philips has another four weeks to go in his induction period before he is "able to really get stuck into the business".