Too much change on a range of fronts to the detriment of growers marked the reign of Dalton Philips at Morrisons, one of the retailer’s produce suppliers has told FPJ, following the news that the beleaguered CEO is to leave his post.
Philips is stepping down after a 3.1 per cent fall in like-for-like sales saw Morrisons deliver the worst Christmas trading results of the UK’s big-four supermarkets.
A key supplier to the retailer claimed that constant changes to the buying team, “excessive” packaging redesigns, unnecessary innovation and shrinking cost prices have resulted in Philips’ exit.
The supplier, who wished to remain anonymous, said: “Over the last three or four years, we’ve seen the price of everything go up, but that comes alongside a cost price reduction for those of us producing the food that this country and its retailers need.
“We’ve also seen too much buyer movement in that time - you get to know someone, then all of a sudden, someone like the frozen ice cream buyer is replacing them.
“You look at other things that have gone on in the last few years too, such as the veg misting scheme, and you think, ‘do you really need to spend money on that?’
“We know growers who have gone out of business in the last couple of years, and you just think maybe if they’d received a little more help from supermarkets with their 30 to 40 per cent profit margin in that time, they’d get better publicity, and growers willing to help a little more with promotions and ideas.”
Philips, who has been in the position for five years, will remain until year-end results in March, while the search for his successor has begun.
One retail analyst FPJ spoke to believes Philips might have been unlucky in losing his job. He said: “He was only nine months into a three-year plan, so while he may have flip-flopped around before that, there were signs of greenshoots, so maybe he should have got 18 months.”
The analyst noted that Philips’ replacement could perhaps look at scaling back some of the retailer’s extensive fresh produce offering to save on costs and waste, but noted that the low-price strategy had to remain in place as the hard discounters get stronger.
Meanwhile, of his departure, Philips said: “Morrisons is a great company with exceptionally talented people. I’ve been very proud to have worked with them.”
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