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'Fresh eyes' sought for Morrisons

Morrisons ousted Dalton Philips as its boss today after the supermarket's board called for a "fresh pair of eyes" to oversee the chain's revival push.

The decision to remove Mr Philips, who has been in charge since 2010, came as Morrisons posted more disappointing trading figures, with a 3.1% slide in like-for-like sales in the six weeks to January 4.

Morrisons insisted the performance was not the trigger for the departure of Mr Philips, who last year announced £1 billion in price cuts over three years and a new loyalty card scheme promising to match discounters Aldi and Lidl.

Incoming chairman Andrew Higginson 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."

The Bradford-based grocery chain also said today that it is planning to close 10 loss-making smaller stores, putting more than 400 jobs at risk.

The move comes a week after Tesco boss Dave Lewis announced plans for 43 store closures and the cancellation of 49 new stores in its pipeline as the industry comes to terms with a continued squeeze from discounters.

Morrisons, the UK's fourth largest grocer, has grappled with a long period of declining sales and profitability but Mr Philips said recent trading offered signs that the turnaround plan announced last year was starting to pay off.

A key performance indicator measuring items per basket was down by 0.2% on a year earlier compared with 2.4% earlier in the financial year. The decline in the number of transactions was also reduced.

Mr Philips is due to leave the chain by the time of annual results in March, when the company's underlying profits are expected to fall to as low as £335 million.

Shares surged by as much as 6% today, even though the company has not disclosed who will replace Mr Philips.

The 46-year-old Irishman, who is the former chief operating officer of Canada's largest food retailer Loblaw, said: "I'm very sad to be leaving but when a board wants to make a change you accept that and move on."

Mr Higginson, Tesco's former finance director and Morrisons' new chairman from this month, said it was "time for a fresh pair of eyes" over the business.

He added: "Dalton has had a very good five years where he has made a lot of important changes to the business. A business needs trading momentum and we want to restore that sooner rather than later."

Till-roll figures from Kantar Worldpanel published today showed a decline in the company's market share position to 11.3% for the 12 weeks to January 4, down from 11.5% a year earlier.

Neil Saunders, managing director of retail consultancy Conlumino said not all of Morrisons' problems were of Mr Philips making, particularly as it lacked an online and convenience store presence.

Mr Saunders said: "He inherited a business that was ill equipped to deal with many of the challenges of a rapidly changing grocery world and it is fair to say that he has been playing a game of catch-up since he took the top spot.

"Progress has been made in many areas, but it has often been piecemeal and at the expense of brand clarity - what the brand stands for and how it is differentiated in a very crowded marketplace."

Mr Philips was subjected to a humiliating dressing down at the firm's AGM last summer when former boss Sir Ken Morrison compared his strategy with the manure produced by his cattle herd.

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