Morrison Hands Former Tesco Executive Potts Turnaround TaskJillian Ward and Paul Jarvis
Wm Morrison Supermarkets Plc named David Potts as chief executive officer, tasking the former head of Tesco Plc’s Asia unit with reviving the ailing British grocer.
Potts, 57, will start in the role on March 16, Bradford, England-based Morrison said in a statement. He will earn a salary of 850,000 pounds ($1.32 million) a year.
Potts faces a difficult task turning around Morrison, the smallest of the U.K.’s four main grocers. Under his predecessor Dalton Philips, the company experienced about two years of declining quarterly same-store sales. A 1 billion-pound price investment plan to take on discounters Aldi and Lidl has not yet lifted sales, which have been weighed down by intense competition and deflation across the industry.
“David joins at a time when industry trading has been very tough,” Mike Dennis, an analyst at Cantor Fitzgerald, said in a note. “The overall deflation in food is set to continue and shoppers are buying smaller baskets more frequently. Despite this, we believe the potential for Morrisons to improve sales and profits is good.”
Morrison shares rose as much as 2.3 percent in London trading and were up 1.3 percent at 194.3 pence as of 9:45 a.m.
The company has been without a CEO since Philips was ousted in January. His departure after five years in the role coincided with another former Tesco executive, Andrew Higginson, bringing forward his intended start date as Morrison chairman. Potts and Higginson worked together at Tesco for more than a decade, with Higginson spending about 10 years as finance director at the Cheshunt, England-based retailer.
“David is the best retailer I have worked with in 25 years in the industry,” Higginson said in the statement.
Potts started at Tesco as a 16-year-old store assistant in 1973, and rose through the ranks before joining the board in 1998 on the same day as the retailer’s former CEO Philip Clarke. He spent about a decade in charge of Tesco’s U.K. retail business, before becoming Asia head in 2010.
“We believe that David Potts’ expertise on the U.K. market made him the prime candidate for the role,” Clive Black, an analyst at Shore Capital, said in a note. “We would expect a material sharpening of Morrison’s retail act with stronger store standards and improved merchandising.”