‘Bloodbath in Bradford’ in wake of £792m Morrisons losses

Management posts are being culled as the struggling supermarket giant attempts to streamline its operations to take on the burgeoning success of its discount rivals.

About 20 bosses at the Bradford-based company are being axed by the new chief executive, David Potts, in the latest move to counter the firm’s multi-million pound losses.

It is the second time in a week that Mr Potts has wielded the axe at the struggling grocer, in what has been described as “a bloodbath in Bradford”.

Last night, City analyst Clive Black of Shore Capital said that the quick pace of change would be welcomed if it secures the future of WM Morrison Supermarkets Plc.

Mr Black told The Yorkshire Post: “Morrisons has been under-performing for some time. The culture that emerged reflected poorly on the leadership, and the lieutenants in tow.”

Barely a week after joining the business, Mr Potts announced that he was disposing of the services of five directors on the 11-strong management team. Yesterday, it was confirmed that he is also culling the next tier of management.

A Morrisons spokesman said: ”Following last week’s announcement of a reshaped management board, we have also had a number of redundancy conversations with senior managers at the next level in our organisation. These steps are aimed at creating a simpler, leaner Morrisons.”

The Yorkshire Post understands that about 20 senior jobs are going as part of the latest move. Mr Potts has hit the ground running, as he bids to revive a firm which recently slumped to a £792m full-year loss, and has been losing market share to German rivals Aldi and Lidl. His predecessor, Dalton Philips, was ousted after a torrid period.

Morrisons is fighting to reverse falling sales, profits and market share after discounters moved into the grocer’s Northern heartlands, as Mr Philips tried to modernise the business. His five-year reign as chief executive was brought to an end by chairman Andy Higginson in January.

In his first week as CEO, Mr Potts launched a campaign to receive customer and staff feedback. Mr Potts also announced that he would work in a store over Easter, and he encouraged other head office staff to do the same. He also purchased Morrisons shares worth more than £1m.

Mr Potts, a former Tesco executive, was described by one insider as “a force of nature”.

“David’s in control, no doubt about that,” the insider added.

Responding to the latest management cull, Mr Black said: “For those involved ‎in the rationalisation and change at Morrisons’ head office, this is a very difficult and worrying time.

“No senior management team enjoys this sort of decision-making.

“However, Morrisons simply has not been performing well enough, and if such fundamental change did not take place, then the subsequent implications for the group would have been greater still - possibly fatal.”

NEW LOOK FOR LEEDS STORE

MORRISONS is to expand its Leeds store at the Merrion Centre in a multi-million pound transformation plan, underlining the group’s determination to regain ground in its northern heartlands.

Landlord Town Centre Securities said the Bradford grocer will take over the neighbouring Peacocks store in a transformation plan that will increase the size of the site by 10,000 sq ft.

Morrisons recently extended the lease to 2040. It is the anchor tenant at the 51-year-old shopping centre.

TCS said he investment will allow a change of layout and add a number of brand new ranges.

Work is expected to begin immediately and is scheduled to be completed by late summer this year.

Edward Ziff, chairman and chief executive of TCS, said his business has been working closely with Morrisons on its lease renewal and expansion plans for the site.

He added: “I am delighted that they have chosen to invest in the store which will benefit shoppers and complement our continuing investment in the Merrion Centre.”

His father Arnold Ziff launched the centre in 1964 as the largest of its kind in the UK.

Meanwhile, TCS has returned to the industrial sector in a sign of growing confidence in the asset class.

It has acquired freeholds in three units Waterside Business Park, a multi-let industrial estate in Stourton, Leeds from clients of CBRE Investors.

The three units were purchased for £4.48m, reflecting a net initial yield of 7.25 per cent.

Mr Ziff said: “This acquisition, our first in the industrial sector for a number of years, is a logical and complementary diversification of our existing portfolio.

“The site is in a strategic position, let to high quality tenants with excellent access to key routes.”

Tenants include SW Group Logistics limited, European Stock Solutions Limited and Daniels Chilled Foods Ltd.

Stourton is regarded as the prime industrial and distribution area of Leeds with excellent access to the national motorway network.

Separately, TCS has contracted pre-construction services for the refurbishment and extension of Merrion House, which will become Leeds council’s central base for main services.

The company has agreed a 25-year lease with the local authority.