Morrisons boss Dalton Philips to quit as sales fall
His plan to leave the beleaguered retailer after five, often controversial, years leading the business was announced today (Tuesday, January 13) alongside news that total sales, excluding fuel, fell by 1.3% in the six weeks to January 4.
Like-for-like (LFL) sales excluding fuel were down by 3.1% over the festive period.
Commenting on Philips’ departure, Morrisons’ deputy chairman and chairman elect Andrew Higginson said: “In the next chapter of Morrisons’ development, we need to return the business to growth. The board believes this is best done under new leadership.”
‘Best done under new leadership’
Philips has agreed to remain in place until the end of year results are posted in March.
Higginson said the Morrisons chief executive deserved credit for “facing into and dealing with the pricing issues”, for taking the business into the convenience and online channels and for modernising the company's operating systems. The retailer has begun to search for a replacement.
Philips said: “Over the last five years, we have made many improvements to the business and given Morrisons strong foundations for the future. I wish every success to the company and all of my colleagues, who have, and continue to work so hard.”
He later told journalists in a conference call: “I don’t have another job to go to. My wife has given me a long list of chores to do,” according to BBC News.
Under Philips’ leadership, the retailer had taken flak for its late launch of an online sales channel and convenience stores. Over the past year, Morrisons’ sales have been caught in a pincer movment between the rise of the discount retailers Aldi and Lidl and growing sales at posh retailers Waitrose and Marks & Spencer.
While the other big four supermarkets – Tesco, Asda and Sainsbury – also suffered, hardest hit was Morrisons. In a bid to lure back customers the retailer invested £1bn in a price investment programme and belatedly launched a loyalty card – just as some analysts concluded the idea was falling out of fashion with shoppers.
One particularly high-profile critic of Philips’ leadership was the supermarket chain’s former chairman Sir Ken Morrison. Speaking at the supermarket’s annual general meeting last summer (June 5), the 82-year old, multi-millionaire Morrison slammed Philips’ recovery strategy.
‘More bullshit than me’
“When I left work and started working as a hobby, I chose to raise cattle,” he said. “I have something like 1,000 bullocks and, having listened to your presentation, Dalton, you’ve got a lot more bullshit than me.”
City analysts were unsurprised at Philips’ departure and disappointed by the latest trading update. Shore Capital analysts Clive Black and Darren Shirley concluded: “Given the comparatives, we deem this to be a disappointing update and Morrisons is still the worst performing of the big four superstore groups.”
Planet Retail described the latest results as an “underwhelming, if improving set of numbers”, which revealed the extent of the challenge facing the retailer. Retail analyst David Gray said: “Representing one of the worst declines among the so-called UK big four over Christmas, Morrisons’ results are being impacted by the double whammy of falling food volumes alongside stagnant food price inflation.”
Tesco reported its festive sales fell by just 0.3% over the festive period.
Higgson will succeed the outgoing chairman Sir Ian Gibson on January 22.
In early trading, Morrisons’ shares rose by 4% on the news.
