The CEO Of Morrisons Just Got Axed After Dismal Christmas Results
The latest sales figures from Morrisons are out, and so is CEO Dalton Philips. Sales over the Christmas period, even excluding fuel, were down 3.1% like-for-like, with a 5.2% drop when petrol was include. That's for the six weeks to January 4 2015.
Philips had been CEO for five years. Investors are clearly not unhappy with the move: Shares are up by more than 5% as of 8:15 a.m. GMT.
Three of Britain's four biggest retailers have seen CEO changes in the last year. Justin King departed from Sainsbury in happier circumstances in January last year, followed by Tesco's Philip Clarke during the summer. Tesco had just issued a profit warning, but its dramatic, share-tanking £250 million profit restatement was still to come at that point.
Morrisons had a poor 2014 that was overshadowed by Tesco, but its shares are down by about 30% in the last year. Discounters like Aldi and Lidl have helped to take a chunk out of their business model too, and Morrisons isn't looking too healthy. Morrisons announced plans this morning to close 10 loss-making stores.
John Ibbotson of consultancy retail vision was particularly brutal in his assessment:
Late arrivals to online, convenience, a delayed incursion into the rich south, and hesitant leadership, effectively sealed his fate. While sales may be improving slightly, Morrisons remains, by a distance, the weakest of the Big Four.
Despite cutting prices and trying to match the discounters, Morrisons has lost its price perception and leadership to ASDA. In a consolidation environment, it's looking like the most obvious takeover candidate — but who would want them?
Philips will be staying on until March and Morrisons are searching for a CEO candidate: Likely one from outside the firm.