Morrisons chief executive exits after Christmas sales fall

The intense pressure building on the British retail sector claimed its first scalp of the year on Tuesday with the departure of Morrisons chief executive Dalton Philips following weak Christmas trading from Britain's number four grocer.

Morrisons said on Tuesday it needed a new leader to return the supermarket to growth after it lagged larger rivals Tesco, Wal-Mart's Asda and Sainsbury's under Philips's five-year watch.

The Bradford, northern England, based group posted the worst Christmas performance of Britain's listed supermarkets, with sales at stores open over a year, excluding fuel, down 3.1 per cent in the six weeks to January 4th.

That was slightly better than expected, with analysts’ average forecast predicting a fall of 3.8 per cent and it also marked an improvement on a third quarter decline of 6.3 per cent.

But comparatives with the previous year were very favourable as Morrisons' same store sales fell 5.6 per cent in the Christmas 2013 trading period, and the board decided the time was right for a change. "In the next chapter of Morrisons development, we need to return the business to growth," said chairman designate Andrew Higginson, a former Tesco finance director, who will succeed Ian Gibson as chairman on January 22nd.

"The Board believes this is best done under new leadership." Morrisons said it had started the search for a new chief executive and Philips will remain in his role until the year-end results in March to ensure a smooth transition. The outcome means Morrisons was the worst performer of Britain's big three listed grocers over Christmas. Tesco reported a 0.5 per cent fall in same store sales for the festive period, while Sainsbury's posted a 1.7 per cent decline for its latest quarter. Britain's £174-billion pound grocery market is growing at its slowest pace for two decades as recession-era shopping habits have become entrenched and consumers prefer to spend any increases in disposable income they do have on non-food items.

The so called "big four" grocers, Tesco, Asda, Sainsbury's and Morrisons, have all seen their sales squeezed between the fast growing discounters, Aldi and Lidl, and premium-end players Waitrose and Marks & Spencer.

Reuters