Morrisons CEO to step down after drop in festive sales
Morrisons chief executive Dalton Philips is to leave the supermarket after five years following a drop in sales over the Christmas period.
Although sales improved on recent quarters, total sales excluding fuel fell by 1.3% in the six weeks to 4 January while like-for-like sales dropped by 3.1%.
In a trading statement, the supermarket said that items per basket improved from -2.4% year-on-year in the third quarter to a decline of 0.2% in the six week period. In addition, the number of transactions improved from a third quarter decline of 3.3% to a fall of 1.7%.
Morrisons said its ‘Match & More’ price match points card had launched well with customer sign-up ahead of expectations.
It also revealed that it has served almost double the number of customers in its growing convenience store business this year, and a total of 5 million during the six week period. The supermarket has opened 17 M local stores to date in its fourth quarter, bringing the total to 46 new stores in the year-to-date. However, it will close 10 loss making stores in 2015.
Morrsions’ online business, which launched in January last year, achieved on time delivery of 97.5% during the busy pre-Christmas week.
Commenting on the trading Philips said: "I would like to thank colleagues for delivering a stronger Christmas proposition for our customers. 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."
Morrisons said it continues to expect that 2014/15 underlying profit before tax will be in the range of £335 million to £365 million, after £65 million of new business development costs and £70 million of one-off costs.
In a separate statement, Morrisons said it is to start the search for a new chief executive and that Philips will continue in his role until the year-end results to ensure a smooth transition.
Morrisons chairman 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.
“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. We wish him well for the future."
Philips added: "Morrisons is a great company with exceptionally talented people and I have been very proud to have worked with them. 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."
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