Morrisons pulls plug on CEO Dalton Philips amid disappointing Xmas sales

By Gemma McKenna

Published: 13 January, 2015

Morrisons saw like-for-like sales fall 3.1% in the six weeks to January 4 - making it the worst supermarket performer over Christmas - as the board pulled the plug on embattled chief executive Dalton Philips.

Morisons Dalton online Dalton Philips, Morrisons CEO, is to leave the company in March

The City was predicting lfl sales to fall by a gloomy 3.5%, but Morrisons said is sales trends "improved over the Christmas period" as it made inroads into its trading strategy announced last March.

However, the performance still puts it bottom of the supermarket league tables over the festive period. Morrisons also revealed it was planning to close 10 loss-making stores with a loss of more than 400 jobs, and current chairman Sir Ian Gibson's departure has also been brought forward - all part of plans to turn around the flagging supermarket's fortunes.

Incoming chairman Andrew Higginson, former Tesco finance director, who takes up the role on January 22, 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."

Philips has been in post for five years and is set to stay until the financial year end in March. Since the news of his departure was announced shares have moved up 6%. Higginson said the new chief executive will "almost certainly be" an external candidate.

BBC Radio 5 Live business correspondent Adam Parsons tweeted from the conference call:

Dalton Philips: "When a board wants to make a change then you have to accept it...tonight I will be going for a very large beer." #Morrisons
? Adam Parsons (@AdamParsons1) January 13, 2015

As for the rest of its Christmas performance, online sales contributed 1% to lfls during the period. It was the first Christmas for its online offer, its Match & More scheme, and many of its M Local convenience outlets.

As for its online business, in the week before Christmas on-time delivery hit 97.5%, and product substituitions were 1.4%. Last week marked the one millionth orders, which coincided with the first anniversary of the launch of its online offer.

In convenience, 5 million customers shopped there over the six weeks of Christmas. It opened 17 M Local stores in the fourth quarter, bringing the total to 46 new stores so far this year.

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."

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