Calls are increasing for Sir Ken Morrison to step down, after his retail chain issued its fourth profit warning since taking over Safeway.
City rumours proved correct as the retailer announced profit margins would remain significantly below 2004 levels for much of the coming year.
Now, two key shareholder groups, the National Association of Pension Funds and the Association of British Insurers (ABI) are applying increasing pressure on Sir Ken’s position.
The ABI said it had “serious concerns about corporate governance standards in the company”, while the National Association of Pension Funds called for shareholders to vote against re-electing Sir Ken as chairman at Morrisons’ annual meeting next week.
The problems were again attributed to the Safeway digestion, with group performance suffering from the cost of running dual systems during the merger process.
It said the duplicate costs were likely to remain higher and take longer to eliminate than previously thought.
The retailer’s finance director had quit shortly after its last profits warning in March and is yet to be replaced.
In a statement, Morrisons said: “No significant reduction is expected until the completion of the programme to convert the acquired Safeway units to the Morrisons format in November 2005.”
The process of conversion is said to be going well and sales at converted stores are described as “very encouraging”. Morrisons' shares closed up by one and a quarter pence at 187.5 pence.
