Growth slows but Morrisons won't be hurried into replacing Bolland

Published on Thursday 19 November 2009 21:18

SUPERMARKET giant Morrisons hopes to have chief executive Marc Bolland's successor in place early in the new year, as it also disclosed yesterday a slowdown in sales growth.

City analysts said one of the front-runners for the job, following Bolland's defection to Marks & Spencer, announced on Wednesday, would be Richard Pennycook Morrisons' well- regarded finance director.

Sir Ian Gibson, chairman of the group, which revealed third-quarter like-for-like sales grew 4.3 per cent, paid tribute to the "enormous contribution" Bolland had made in his three years in the top job.

But Gibson stressed the group had a talented team that could handle the transition. "Our objective is to find the right person, male or female, rather than hurtle into it. We are not in any sense in panic here," he said.

Gibson said the search was under way and, asked when an announcement may be made, he added: "I would hope early in the new year, we'll see."

Pennycook said he would, "of course", think about applying for the top job. "It has all come up pretty fast," he said. "It was only yesterday (that it was disclosed Bolland is leaving by the end of January to become M&S's chief executive alongside chairman Sir Stuart Rose]."

Pennycook said Bolland, who is credited with turning around Britain's fourth-biggest supermarket group after its initially-botched acquisition of Safeway in 2004, had been "a great member of the team and we're sorry to see him go".

Morrisons said the slower same-floorspace Q3 sales growth – down from 7.8 per cent in the first trading half – was partly due to a rapid decline in food price inflation.

The outgoing chief executive deflected questions on Morrisons' lack of an online offering and minimal non-food ranges, saying the time to address such strategic questions was at the annual results.

Clive Black, food retailing analyst at Shore Capital, said clarity was needed on who the new boss would be "and what that person's ideas and strategy for the company are; a strategy that even under Bolland was far from clear and, indeed, a growing worry".

Analysts said external candidates might include Richard Brasher and Tim Mason, respectively commercial and market director and head of US operations at Tesco, as well as Asda's head of merchandising, Darren Blackhurst, and M&S finance director Ian Dyson.

Morrisons, which has been expanding into the south of England, said total sales grew 9.1 per cent in the 13 weeks to 1 November. Bolland said customers had benefited from deflation in the latest trading period, with wheat prices down 20 per cent and potatoes down 15 per cent.

The company said it served an average 10.8 million customers a week during Q3, 1.6 million more than two years ago.