LONDON (Reuters) - The intense pressure building on the British retail sector claimed its first scalp of the year on Tuesday with the departure of Morrisons (L:MRW) CEO Dalton Philips following weak Christmas trading from Britain's No. 4 grocer.
Morrisons said on Tuesday it needed a new leader to return the supermarket to growth after it lagged larger rivals Tesco (L:TSCO), Wal-Mart's (N:WMT) Asda and Sainsbury's (L:SBRY) under Philips's five-year watch.
The Bradford, northern England, based group posted the worst Christmas performance of Britain's listed supermarkets, with sales at stores open over a year, excluding fuel, down 3.1 percent in the six weeks to Jan. 4.
That was slightly better than expected, with analysts' average forecast predicting a fall of 3.8 percent and it also marked an improvement on a third quarter decline of 6.3 percent.
But comparatives with the previous year were very favourable as Morrisons' same store sales fell 5.6 percent in the Christmas 2013 trading period, and the board decided the time was right for a change.
"In the next chapter of Morrisons development, we need to return the business to growth," said chairman designate Andrew Higginson, a former Tesco finance director, who will succeed Ian Gibson as chairman on Jan. 22.
"The Board believes this is best done under new leadership."
Morrisons said it had started the search for a new CEO and Philips will remain in his role until the year-end results in March to ensure a smooth transition.
The outcome means Morrisons was the worst performer of Britain's big three listed grocers over Christmas. Tesco reported a 0.5 percent fall in same store sales for the festive period, while Sainsbury's posted a 1.7 percent decline for its latest quarter.
Britain's 174-billion pound grocery market is growing at its slowest pace for two decades as recession-era shopping habits have become entrenched and consumers prefer to spend any increases in disposable income they do have on non-food items.
The so called "big four" grocers, Tesco, Asda, Sainsbury's and Morrisons, have all seen their sales squeezed between the fast growing discounters, Aldi and Lidl, and premium-end players Waitrose (JLP.UL) and Marks & Spencer (L:MKS).