Waiting on the next step in the Morrisons' journey

The son of a County Wicklow egg farmer, Mr Philips' appointment in January took the City completely by surprise.

The Bradford-based chain appointed Mr Philips, chief operating officer at Canada's biggest grocery chain Loblaw, in preference to internal candidates.

Last week Morrisons said Mr Philips, 41, will take up the role on March 29, replacing Marc Bolland who left the company in December to become chief executive of Marks & Spencer.

Finance director Richard Pennycook had been seen as the bookmakers' favourite to win the top job and Morrisons is hoping he doesn't jump ship after failing to land the top job.

When asked about his plans last week, Mr Pennycook said: "I've got a big job. Retail is a team sport, I'm very happy with the job I'm doing." Which sounds suspiciously like the assurances that Mr Bolland gave before he jumped ship, but only time will tell.

In addition to his experience in Canada, Mr Philips has a broad understanding of the supermarket sector having worked for Asda's US parent Wal-Mart for seven years.

Mr Philips worked for Wal-Mart's international division between 1998 and 2005.

But he was poached by Wal-Mart's arch rival Loblaw in 2007 where he worked closely with chief executive Allan Leighton – the former Asda chief executive.

Mr Leighton describes Mr Philips' appointment as good for him and good for Morrisons.

"Dalton is very smart, reliable and operationally very strong," he said.

According to Morrisons' chairman Sir Ian Gibson there is "nothing to overhaul" at Morrisons, yet the market is expecting Mr Philips to come up with a new strategy that will spearhead the group's future growth.

Last week Morrisons laid out plans for an ambitious expansion programme to open 60 new stores across the UK over the next three years, but the market will want to hear something other than "more of the same".

Once he has his feet under the table, analysts will want to hear whether Mr Philips intends to follow rivals into markets such as household goods, online shopping, reward cards and overseas stores.

Analyst Sam Hart at Charles Stanley said: "Philips is not expected to initiate a full strategic review of the business, but key decisions will have to be made on whether to expand more aggressively into non-food and whether to launch an on-line grocery delivery service."

Mr Philips' initial thoughts on the business are likely to be presented alongside the interim results in September.

According to analyst Keith Bowman at Hargreaves Lansdown, Mr Philips' experience of general merchandising and international retailing could prove invaluable if the company does decide to expand into non-food and/or international retail.

Analyst Darren Shirley at ShoreCap agrees: "Philips has a high level of experience in general merchandising and international. Whether this suggests that the Morrisons board has realised that the company needs to diversify to sustain growth is interesting."

Many analysts believe that the likeliest scenario is an expansion into non-food.

If this is the case, Mr Philips' extensive experience of general merchandise will stand the group in good stead if it decides to expand beyond the existing kitchen accessories it currently offers.

Mr Shirley said that while an expansion into non-food would be a huge change in direction for the company, it is a "well-trodden path" that three of the country's big four have already taken.

A less likely scenario is that Mr Philips will take the group abroad. When asked if this was likely, Sir Ian brushed it off saying: "I'd far rather we got to Chelmsford than anywhere else", yet Mr Philips has a good pedigree if the group does decide to open stores overseas.

He worked in Wal-Mart's international division, rising to chief operating officer of the German operations before the company quit the market.

But Morrisons' past success has come from a very narrow base. It does not operate outside the UK and unlike its rivals it is almost solely a grocer with non-food making up just six per cent of sales. This means there is more to risk if it does set out on a new track.

Following last week's annual results analyst Dave McCarthy at Evolution said: "We were reassured by the chairman that the new chief executive will not be changing the core strategy. We regard this as good news as Morrisons still has the scope to double profits by growing sales and margins."

Mr Philips has a fine line to tread. He will want to stick to Morrisons' core principles but the market will expect him to stamp his mark on the business and take it forward.

At this stage it looks like an expansion into non-food is the most likely, although with Mr Philips' extensive experience a move abroad can't be ruled out.

Dalton Philips' career history

2007 – 2010

Chief operating officer at Loblaw, Canada's largest food retailer with 1,000 stores .

2005 – 2007

Chief executive of Brown Thomas Group in Dublin, a luxury goods retailer.

2002 – 2005

Wal-Mart Stores, vice president and chief operating officer, Germany.

2001 – 2002

Wal-Mart Stores, head of retail, Supercenter & Todo Dia Divisions, Sao Paulo.

1999 – 2000

Wal-Mart Stores, commercial director Wal-Mart Supercent-er Food Division, Sao Paulo.