Morrisons Chief Executive steps down after Christmas sales fall
Dalton Philips is to step down as Chief Executive of Morrisons following another period of weak trading. The announcement came after the group revealed a 3.1% fall in like-for-like sales over the six weeks to 4 January, the weakest festive performance so far amongst the supermarket multiples.
However, the figure was slightly better than the City had expected and marks an improvement on a third quarter decline of 6.3%.
After five years leading the business, Philips will continue in his role until the year-end results due in March whilst a replacement is sought. The group also announced that its Chairman Sir Ian Gibson would step down earlier than planned with Andrew Higginson, the former Tesco executive, taking over on 22 January.
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. I would like to thank Dalton for his contribution as CEO. He has brought great personal qualities and values to his leadership of the business, having had to manage against a background of considerable industry turmoil and change. He deserves particular credit for facing into and dealing with the pricing issues that have now become evident, for taking the business into the convenience and online channels, and for the steps he has taken to modernise the Company's operating systems."
Philips added: “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."
Meanwhile, in a separate trading statement the group said that total sales were down only 1.3% with it pointing to improved volume market share in food after it rolled out price cuts as part of its £1bn turnaround plan. It added that items per basket improved from -2.4% year-on-year in Q3 to -0.2%, and number of transactions from -3.3% to -1.7%.
The group said that it had opened 17 M local stores so far during the fourth quarter as it pushed ahead with its expansion in the convenience sector, bringing the total to 46 new stores year-to-date. Following on from Tesco’s store closure announcement last week, Morrisons also said today that it would be closing 10 loss-making stores during 2015.
Philips said: “Our like-for-like sales were a step-up on recent quarters and trends in the key operational measures continued to improve. Our three-year cost saving and cash flow targets remain on track. Although there is still much to do, we are building the platform to enable us to compete better in an industry that we expect to be highly competitive in the year ahead."
More to follow…