The Christmas period was another cracking one for Morrisons: the supermarket chain delivered like-for-like sales growth of 6.5% in the 6 weeks to January 3, better than the City expected and better than both Tesco and Sainsbury’s. It’s further testament to the job done by outgoing CEO Marc Bolland – although with Bolland now on gardening leave ahead of his move to M&S, and no word yet on his successor, investors seem to be getting a little bit nervous about whether Morrisons can maintain this kind of performance in 2010...
In Bolland’s absence, chairman Sir Ian Gibson was doing the honours today; reporting that total sales were up an impressive 11.2%, he ascribed Morrisons’ success to its 'distinctive offer, eye-catching promotions and relentless focus on our core strengths of fresh food and great value’. Not even the pre-Yuletide bad weather – which particularly affected Morrisons’ northern heartland – was able to throw it off its stride. All of the Big Four supermarkets had a pretty good Christmas, as shoppers loaded up on festive goodies – but with sales growth ahead of its three main rivals, Morrisons is arguably the biggest winner.
So what about 2010? As seems to be compulsory these days, Gibson made some cautious noises about the outlook for consumer spending. But he reckons that Morrisons’ prices will stand it in good stead if customers start to economise: ‘We expect the market to remain challenging... In this environment we believe Morrisons’ value credentials will serve us and our customers well.’
But there’s no doubting his biggest headache: finding a new CEO who can keep up the momentum Bolland has created. And it’ll be a tough ask; some City analysts reckon the only way from here is down. With the soon-to-be M&S boss busy tending to his pot plants (in the Prince Charles sense, we mean – it’s not a casual Dutch stereotype) as he haggles over his release date, Morrisons is currently in a CEO-less state of limbo.
Although the FT reckons Morrisons' FD Richard Pennycock is a leading contender for the top job, the supermarket is also conducting a full external search. That’s a time-consuming process, which presumably explains why there was no word on it today. But judging by the fall in Morrisons’ share price today, investors will remain nervous until the supermarket chain fills this leadership vacuum.
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