Dalton Philips leaves struggling Morrisons

Dalton Philips said he was 'sad to be leaving' after leading the supermarket group for five years. Picture: Morrisons/PA

Dalton Philips said he was 'sad to be leaving' after leading the supermarket group for five years. Picture: Morrisons/PA

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THE RETAILER, which like its rivals has come under pressure from discount chains Aldi and Lidl, also said it planned to close ten loss-making stores this year, putting more than 400 jobs at risk, but did not reveal which branches will go.

The retailer, which like its rivals has come under pressure from discount chains Aldi and Lidl, also said it planned to close ten loss-making stores this year, putting more than 400 jobs at risk, but did not reveal which branches will go.

Philips, who has been in charge of the struggling supermarket for five years, will leave when the firm delivers its annual results in March.

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He said: “I’m very sad to be leaving but when a board wants to make a change you accept that and move on.”

Chairman-elect Andy Higginson, formerly an executive at rival Tesco, said the Morrisons board believed the push to return the business to growth was “best done under new leadership”.

Higginson, who will succeed current chairman Sir Ian Gibson next week, said it was “time for a fresh pair of eyes” at the chain, although he said the company’s Christmas performance was not a factor behind the departure of Philips.

As part of a wider plan announced in March to invest £1 billion in price cuts over three years, initiatives brought in by Philips included a loyalty card scheme that pledges to match prices at Aldi and Lidl.

Figures published yesterday showed that like-for-like sales at the Bradford-based retailer fell 3.1 per cent in the six weeks to 4 January – although this marked an improvement on the 6.3 per cent slide seen in the third quarter ending 2 November.

John Ibbotson, director of consultancy Retail Vision, said: “Philips has been in the firing line for some time so it’s no surprise he’s on his way out.

“Late arrivals to online, convenience, a delayed incursion into the rich south [of England], and hesitant leadership effectively sealed his fate.

“While sales may be improving slightly, Morrisons remains, by a distance, the weakest of the big four.”

However, investors welcomed yesterday’s trading update and shares in the group jumped 7.9p, or 4.5 per cent, to end the session at 184.8p.

Morrisons also told investors that a key performance indicator, measuring the number of items in shoppers’ baskets, was down by 0.2 per cent, compared with a fall of 2.4 per cent earlier in the financial year. A decline in the number of transactions was also lower.

Nicla Di Palma, equity analyst at Brewin Dolphin, said: “As the UK consumers enjoys a slight increase in salary and lower petrol costs, consumers might be tempted to go back to the traditional supermarkets, although it is too early to say.

“However, there will be uncertainly over the strategy for some time and a new chief executive is more likely to cut the dividend. We continue to believe Morrisons will be the largest market share loser to the discounters.”

Joanne McGuinness, national officer at the shopworkers’ union Usdaw, described the group’s store closure plans as “devastating news” for affected staff.

She said: “Our priority is to maximise employment within Morrison’s, seek redeployment opportunities for members whose shop is closed and minimise compulsory redundancies.”

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