Morrisons Appoints Former Tesco Executive David Potts as New CEO
Appointment means that all three of Morrisons’ top executives previously worked for rival Tesco
Shopping trolleys at a Morrisons supermarket store in London. Morrisons said on Wednesday it has appointed a new CEO to return the retailer to growth. PHOTO: REUTERS
LONDON— Wm. Morrison Supermarkets PLC, Britain’s fourth biggest supermarket chain, said Wednesday it has appointed industry veteran and former Tesco executive David Potts as its new chief executive officer, replacing Dalton Philips who left the role earlier in February after five years at the helm.
Mr. Potts has 40 years in grocery retailing, starting at Tesco in 1973 on the shop floor, rising to become retail director in the U.K. and chief executive of its Irish businesses. Since leaving Tesco in 2011 he has acted as a retail expert for several international advisory and private equity businesses.
Analysts aren’t all convinced that Mr. Potts is the right man for the job, however. “The job is a very tough one and David has not previously had CEO experience,” said Exane BNP Paribas’ analyst John Kershaw. “It could be argued that David Potts in part oversaw the demise of Tesco.” Still, Mr. Kershaw also said “Mr. Potts was an able operator and a very good motivator of staff.”
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Shore Capital analyst Clive Black was more optimistic. “We believe that David Potts’ expertise on the U.K. market made him the prime candidate for the role,” said Mr. Black. “We believe that he will bring focus and pace to Morrisons.”
With the handover of the top role at Morrisons, three of the U.K.’s “big four” supermarkets have changed CEOs in the past 10 months, reflecting a period of unprecedented turmoil for the group. The group has been losing customers to high-end grocer Waitrose and discount chains such as Aldi and Lidl, which are rapidly expanding and benefiting from an improving customer perception of quality.
The appointment of Mr. Potts now means that all three of Morrisons’ top executives previously worked for rival Tesco, which analysts say is a plus since they will likely get along. Trevor Strain, who has been chairing the management board and covering Mr. Philips’ executive responsibilities since February, worked at Tesco in a number of roles including as finance director of the behemoth’s U.K. property group and its U.K. planning and reporting group. Andrew Higginson, who became chairman at Morrisons in January, was a Tesco board director for 15 years.
Morrisons has been cutting prices in a bid to take share from its larger rivals, while fending off Aldi and Lidl. Earlier this month, it said it was cutting prices across a range of basic items such as bread, milk, butter and sugar. Its moves come as Tesco’s new CEO Dave Lewis has announced his own slew of initiatives, including selling noncore assets, closing unprofitable stores and reducing Tesco’s product lineup.
The number four retailer by market share said Mr. Potts will take on his new role from March 16 and be paid a salary of 850,000 pounds ($1.3 million) a year, the same as his predecessor.
