Wm Morrison on Tuesday announced the appointment of former Tesco executive David Potts as chief executive.
He replaces Dalton Philips, who was ousted last month after a series of strategic U-turns and failing to revive sales despite pumping hundreds of millions of pounds into price cuts.
Here are the key qualities that could help Mr Potts turn around Britain’s fourth biggest supermarket chain — and a look at the scale of the challenge.
He’s a retailer through and through.
David Potts began his retail career at 14 working part-time in a Manchester greengrocer. In June 1973, aged 16, he left school on a Friday and began working as a store assistant on the following Monday at Tesco in Ashton-under-Lyne, near Manchester.
He rose through the ranks of Britain’s biggest retailer, becoming first a store and then a regional manager. In 1997, Mr Potts moved to Ireland to run and integrate two businesses Tesco had acquired. Three years later he returned to the UK and was elevated to running all of its UK stores and its supply chain, also becoming a member of the board.
Although he was briefly chief executive of Tesco’s Asian operations, he has spent most of his career in UK supermarkets.
He is unlikely to bring back misted veg.
A no-nonsense Mancunian with an unassuming manner, Mr Potts is likely to have little time for some of the gimmicks — such as misters to keep vegetables fresh — that marked the era of his Mr Philips.
Morrison is keeping tight-lipped on his strategy, but he is likely to focus on getting the basics of retail right.
Mr Potts’s down-to-earth approach has pleased Sir Ken Morrison, who led the company for 50 years, and who berated Mr Philips for having more “bullshit” than his herd of cattle, and not having enough experience of the UK market.
Sir Ken has met Mr Potts and approves of the choice. “It’s a good appointment,” he said on Wednesday.
He knows Andrew Higginson, chairman of Morrison, very well.
Mr Potts and Mr Higginson go back a long way. They were among the cadre of top Tesco executives who transformed the retailer under Sir Terry Leahy, and worked together for 15 years.
However, Nick Bubb, the independent retail analyst, says Mr Potts must prove that he has more to offer than being “an old mate of the chairman”.
The appointment has also raised eyebrows given that Tesco is now struggling — although Mr Potts and Mr Higginson both left Tesco some time ago.
Mr Higginson insisted on Wednesday that Mr Potts was the right man for the job, and he was not trying to “create a mini-Tesco”.
He is going to have his work cut out. Although there are signs that trading is picking up — with Morrison the fastest-growing of the big four supermarkets in the four weeks to February 1, according to Kantar Worldpanel — turning round Morrison will be no easy task.
Mr Higginson conceded on Wednesday that it could take three to five years to turn Morrison round. Moving upmarket in the depths of the downturn alienated many of the chain’s traditional customers, particularly in its northern heartland.
Morrison is trying to win back customers who have deserted it for Aldi and Lidl, while it also faces competition from Asda and a more confident Tesco.
While Mr Philips invested heavily in refurbishing stores, much of the store estate still needs sprucing up. Mr Potts will also need to keep putting resources into cutting prices in an environment that has been vastly altered by the discounters.
Financially, he does not have that much wiggle room. Profits are already expected to halve this year to between £325m and £375m, and although the 2014-15 dividend is safe, the company is expected to review its dividend policy thereafter.
Bruno Monteyne, an analyst at Sanford Bernstein, says bluntly that the UK has moved on, and there may be no need for Morrison. “It’s a good appointment, but the reality has not yet set in about how difficult it is going to be to turn round Morrison,” he says.
He’s a big sports fan.
As a Manchester City fan, Mr Potts will be disappointed by Tuesday night’s defeat at the hands of Barcelona. He was linked with the Manchester City chief executive’s role when he left Tesco and one of his two grown-up sons is a football agent in the northwest.
He also likes to keep in shape, practising Krav Maga, the Israeli self-defence system, walking and swimming.
As well as keeping fit, since leaving Tesco Mr Potts has been working on a non-food retail concept and consulting. He has also volunteered for charities, and was awarded a CBE for his services to employment, skills and apprenticeships in retail two years ago.
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