The former chairman of Morrisons has launched an extraordinary tirade against the supermarket's leadership, describing the chief executive's strategy as "bullshit" and warning that the business founded by his father had been ruined.
Morrison's outburst drew loud applause from hundreds of independent shareholders in the meeting at the company's Bradford headquarters as he picked apart the record of Philips and his management colleagues. He said the supermarkets had been neglected in favour of ill-conceived ventures into babywear retailing, convenience stores and selling online.
"A really first-class business has been ruined by a lack of leadership from the top," said Morrison, who built his father's grocery shop into a national chain before stepping down in 2008. "The results have been described by the chairman and the chief executive as disappointing. I personally thought they were disastrous."
Over the past three months Morrisons has reported a 7.1% slump in sales - the biggest revenue drop at a listed supermarket in a generation. When Philips joined Morrisons in 2010 the business did not have a website or convenience stores, the industry's fastest-growing sales channels.
Morrison's comments came as shareholders registered a significant protest vote against the management team who have presided over a 27% fall in the
Gibson announced at the AGM he would stand down next year. But he denied he had felt under pressure to do so, saying he decided to announce his departure to "clear up any speculation and uncertainty" and put an "orderly plan" in place.
In the packed meeting a chorus of former and current employee-shareholders, family members and small investors criticised the company for a series of strategic missteps, particularly the purchase of baby goods retailer Kiddicare which cost it pounds 163m in profit writedowns. Several shareholders called for the board to step down and for more attention to be given to standards in the big supermarkets which form the core of
Gibson said the business was suffering alongside many of its rivals amid dramatic changes in the way shoppers buy their groceries. But he said:"This company is not in a rescue situation. It's a very sound business that is in the process of still growing."
He admitted that buying Kiddicare was a mistake but said mistakes had been made in previous generations at the company.
In a remark clearly aimed at Sir Ken, he said: "We are still paying for some of those [mistakes]. To have to launch online 16 to 14 years after the competition, not knowing anything about IT as a consequence, is one of the problems."
Gibson's departure could increase the pressure on Philips, who was hired by him. The chairman has supported giving the chief executive a year to produce results that will impress an incoming chairman looking to drive change.
Philips said: "There's a well documented difference on strategy between Sir Ken and myself. My job is to deliver on the strategy we have outlined to shareholders with their support."
Most Popular Stories
- Criminal Investigation Opened Into James Foley's Death
- Swiss Suicide Tourism Doubled Since 2009
- Wealth Gap Widened in Past Decade: Census
- Florida's Largest Insurer Says 'Bailout' Attacks Unfair
- Gap Reports Higher Profits, India Plans
- James Foley Beheading Sparks Anger, Little Action
- International Revulsion Grows Over James Foley Death
- Beyonce, Jay-Z Cuba Trip Was Legal After All
- Chinese Stock Funds Are a Late-summer Bloomer
- Sears Holdings Loses $573 Million