Martin Ackroyd, who was on the main board from 1987 to 2005, slammed the group’s “me-too” approach to management, described the rush into small stores as “daft” and questioned the profitability of home delivery with its “horrendous costs”. Read Martin Ackroyd’s article.
Morrisons last night strongly rejected his criticisms, suggesting he was “trying to rewrite to history”.
Mr Ackroyd, who resigned as finance director after a string of profit warnings in 2005, is the latest of the old guard to hit out at the current board over the declining fortunes of the Bradford-based business.
The group issued a huge profit warning in March, compounding share price falls that have seen the stock lose a quarter of its value this year.
Sir Ken Morrison, the former chairman, accused chief executive Dalton Philips of talking “b******” in an extraordinary intervention at last week’s annual general meeting.
This came after Roger Owen, the former property director, compared Morrisons to “a supertanker heading towards an iceberg” and called on the chairman Sir Ian Gibson to resign.
Morrisons responded to Mr Owen’s criticism by claimimg he should consider his role as a director of a board that left the group, uniquely among the big grocers, with no online and no convenience offer.
Under Mr Philips, Morrisons has opened 100 convenience stores and is rolling out a home delivery service.
Mr Ackroyd, 63, said any suggestion that the board headed by Sir Ken did not know how to run a shop is “probably the biggest insult you could bring”.
He said the former board never felt the need to copy Tesco, Sainsbury’s or Asda, certainly did not have concerns about the plethora of small supermarket operators and nor did it panic when the German discounters Aldi, Lidl and Netto entered the market in the 1990s.
Mr Ackroyd said the old directors fought to keep costs to a minimum so Morrisons could offer its customers extremely competitive prices with unbeatable in-store offers. He added that Morrisons stores were always well maintained, fully stocked and welcoming.
He said they considered introducing a loyalty card but dismissed it as being akin to the old Co-op dividend, in which customers paid over the odds today to be awarded with vouchers tomorrow.
He also claimed that they discussed home delivery and smaller shops in great detail but dismissed the ideas.
“Small stores because we had been there and then spent our careers building bigger and better stores and home delivery because the costs are horrendous and can only be fully recouped by subsidy from the superstore network thus penalising the in-store customer,” said Mr Ackroyd.
Some commentators have rounded on the old guard for selling off 112 small stores following the acquisition of Safeway in 2004.
Mr Ackroyd said: “According to the perceived 2014 wisdom, we were foolish to sell the small stores ten years ago but when you look at the facts the decision was not as daft as the rush to open small stores now is.”
Somerfield bought them from Morrisons; Somerfield found itself in trouble and sold them to the Co-op; the Co-op struggled with the stores and has now sold some back to Morrisons, he said.
Mr Ackroyd told The Yorkshire Post: “It is a crying shame that Dalton Philips and his large posse of non-executive directors - another cost we knew we could do without - do not recognise that falling sales and collapsing profits are not the fault of the previous management failing to recognise the challenges of the 21st century but his board’s failure to carry on the 20th century philosophy of being the lowest-cost operator in fully-stocked large superstores.”
A spokesman for Morrisons strongly rejected the latest criticism of management.
He said: “Martin Ackroyd resigned from the board over nine years after a string of profit warnings. His comments now are unwelcome, inaccurate and attempt to rewrite history.”
The spokesman declined to elaborate.
Mr Ackroyd fell on his sword in 2005 following intense criticism from the City and shareholders that neither he nor the management team were up to the job as Morrisons struggled to integrate the £3bn acquisition of Safeway a year earlier.