The boss of Morrisons, Dalton Philips, is to leave the supermarket after five years following the announcement that Christmas sales fell at a worse rate than predicted.

Excluding fuel, in the six weeks to January 4th, the supermarket saw a decrease in total sales of 1.3%, along with a 3,1% decrease in like-for-like sales.

total sales including fuel were down 3.6% and LFL sales including fuel, of which online contributed 1% were down 5.2%.

The news comes despite the fact that Morrisons’ online business achieved “industry-leading customer service metrics” with 97.5% of deliveries on time and product substitutions at just 1.4%.
The company’s convenience arm, which opened a further 17 stores in the quarter, also served almost double the number of customers in the past year.

Mr Philips said: "I would like to thank colleagues for delivering a stronger Christmas proposition for our customers. 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."
He added that expectations for final underlying profit before tax was unchanged, in the range of £335 million-£365 million, after £65 million of new business development costs and £70 million of one-off costs.

However, the company added in a separate statement that it is to start the search for a new chief executive in anticipation of Mr Philips leaving the business. He will continue in his role until the year-end results to ensure a smooth transition.

In a statement, deputy 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. I would like to thank Dalton for his contribution as CEO.

“He has brought great personal qualities and values to his leadership of the business, having had to manage against a background of considerable industry turmoil and change. He deserves particular credit for facing into and dealing with the pricing issues that have now become evident, for taking the business into the convenience and online channels, and for the steps he has taken to modernise the company's operating systems. We wish him well for the future."

Mr Philips added: "Morrisons is a great company with exceptionally talented people and I have been very proud to have worked with them. Over the last five years, we have made many improvements to the business and given Morrisons strong foundations for the future. I wish every success to the company and all of my colleagues, who have, and continue to work so hard."