Video: Morrisons slumps to loss of £792m - expert analysis

Andy Higginson made the comments after the Bradford-based supermarket chain revealed that it suffered an an overall loss before tax of £792m in its last financial year. The scale of the challenge facing David Potts, the new chief executive, became painfully apparent when Britain’s fourth biggest supermarket reported its lowest annual profit in eight years, and warned investors it would cut its dividend. Mr Potts, a former executive at market leader Tesco, starts as Morrisons CEO on Monday.

Mr Higginson said: “The first stage is getting the right CEO in place. We have got that. He has carte blanche to review everything. We want to really get the core stores humming. We need to go back to what Morrisons stands for. It stands for straightforward honesty and a business that is trusted on price.”

Morrisons will also slow down the roll-out of ‘M local’ convenience stores and review the format. Twenty three ‘M local’ stores will close in the 2015-16 year.

Dalton Philips, who was ousted as chief executive earlier this year, was responsible for Morrisons’ move into the convenience sector.

Mr Higginson said: “Convenience is a good opportunity for us long term. Like lots of businesses moving to new areas, we have made some mistakes.”

However, he stressed that he didn’t want to “have a go” at the previous management, although he had to be quite hard nosed about some decisions.

“A lot of people who shop in Aldi and Lidl would much prefer to shop in Morrisons,’’ he said.

Mr Higginson said people made a decision about where they planned to shop based on a “whole host of little things” such as the availability of parking, and the friendliness of the staff.

“If you get them all right, people will choose you,’’ he added.

He wanted Morrisons to build ion its strength as the “quirkiest “of the major supermarkets, adding: “We choose the ground we’re going to fight on.”

“We have got a great bunch of stores now,’’ he added. “They are well located and a good size for people to shop conveniently. People are very affectionate about Morrisons. Morrisons is a business that’s loved.”

When Mr Potts arrives, he will try to improve the performance of its core stores through lower prices, and also focus on product availability and customer service.

Mr Higginson stressed that Morrisons was unique among British supermarkets in making over half of the fresh food it sells. It was also making progress in accelerating cost savings and reducing debt. Mr Potts will also take over as Tesco is showing signs of recovery under its new boss Dave Lewis. Morrisons’ underlying profits - excluding the £1.3bn one-off property hit - fell 52 per cent to £345m in the year to February 1. Like-for-like sales were down 5.9 per cent across the year. It increased its total dividend payment by five per cent to 13.65p a share but warned that its commitment for this year was to pay “not less than 5p a share”.