September 18 2014 Latest news:
Thursday, June 5, 2014
Morrisons chief executive Dalton Philips was subjected to a humiliating public dressing down by former chairman Sir Ken Morrison at the supermarket’s annual general meeting (AGM) today.
Sir Ken, who retired in 2008 after 55 years in which the company became the UK’s fourth biggest grocer, reportedly used bad language to describe Mr Philips’s strategy.
The meeting also saw the announcement by Sir Ken’s successor, Sir Ian Gibson, that he would not be seeking re-election as chairman at next year’s AGM.
Sir Ken’s tirade came in the wake of Morrisons slumping to a £176m loss in the year to February 2.
He said: “The results were described by the chairman and chief executive as ‘disappointing’. I personally thought they were disastrous.
“I warned in 2009 and 2012 that changes being implemented by directors would seriously damage the business and I’m extremely sorry to admit that my comments, whilst unwelcome, were absolutely right and today we have seen the consequences.”
Mr Philips has said the industry is facing the biggest structural shift since the advent of supermarkets in the 1950s, with shoppers turning to discounters Aldi and Lidl.
He plans to invest £1bn in price cuts over three years, and also belatedly launched an online operation this year.
Mr Philips has in addition expanded Morrisons’ presence in the burgeoning convenience sector and moved to update antiquated IT systems.
But it has yet to lift like-for-like sales, which tumbled to a 7.1pc decline in the group’s latest quarterly trading update.
Mr Philips has previously made stark comments about the need to drag the supermarket into the 21st century, though he has refrained from criticising his predecessors.
Last year he said its lack of an online presence meant it was losing £500 million a year in sales to rivals and that it was still using pen-and-paper methods to check stock - the only retailer in the world of its size still to do so.
He said that when he took over in 2010 parts of the business had been two decades behind rivals, with cash still being counted manually in stores at the end of each working day.
It was a 21st century business run on “infrastructure firmly stuck in the 20th century” with the antiquated systems making it difficult to plan promotions such as multi-buy offers, he said.
Morrisons declined to comment on Sir Ken’s remarks.
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