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Former Loblaw exec out at British grocer

Dalton Philips leaving top job at struggling Morrisons in March

Five years ago, Dalton Philips left his post as chief operating officer at Loblaw Companies to take on the top job at the U.K.’s fourth largest grocer: Morrisons.

Morrisons, perhaps Britain’s stodgiest grocer, badly needed an update and Philips (right), an Irishman once thought to be the next president of Loblaw, seemed the right choice to take 500-store Morrisons into the 21st century.

Whatever improvements Philips made weren’t enough. On Tuesday, Morrisons’ board announced that he would be replaced. Philips will stay on until the end of March while a new chief executive is sought.

Morrisons, like other conventional British grocers, is facing a two-front war. On one end, high-end grocers, such as Waitrose and Marks & Spencer, are stealing market share. On the other end, discounters led by the German duo of Aldi and Lidl are winning the blitzkrieg for consumer dollars.

In the six months to January 4, Morrisons same-store sales fell 3.1 per cent.

“We need to return the business to growth. The board believes this is best done under new leadership,” Andrew Higginson, Morrison’s new chairman said in a statement Tuesday.

In the same press release, Philips said he was “very proud” to have worked at Morrisons and that “over the last five years, we have made many improvements to the business and given Morrisons strong foundations for the future.”

Before Morrisons, Philips spent three years at Loblaw under the leadership of then-president Allan Leighton.

Some speculated that Philips would eventually succeed Leighton. (Some 10 months after Philips went to the U.K., Loblaw announced Leighton's departure and hired Vicente Trius, a Spanish grocer with Walmart experience, to replace him. Trius left Loblaw last summer.)

Before joining Loblaw, Philips worked for the Irish retailer Brown Thomas and also spent time with Walmart in Germany as well as several other retailers in various countries.

In an interview with Canadian Grocer after his first year at Morrisons, Philips explained his strategy was to emphasize fresh food at both Morrisons supermarkets as well as at new convenience stores called M Local.

For a while, Philips seemed to find success. In the fall of 2011, The Telegraph called Morrisons the “fastest growing of Britain’s four big supermarkets,” and noted that despite Morrisons less than exciting reputation it was outperforming its larger rivals: Tesco, Sainsbury’s and Asda.

But with stiff competition in recent years, Morrisons has struggled.

For the 12 weeks to Jan. 4, its market share fell 1.6 per cent to 11.3%, according to Kantar.

On Tuesday, in addition to announcing Philips’s departure, Morrisons also said it would close 10 money-losing stores.

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