Marc Bolland said he could not turn down the opportunity to become Marks & Spencer's chief executive yesterday, as he unveiled a sharp slowdown in Morrisons' third-quarter sales.
Marks & Spencer said on Wednesday that Mr Bolland would take over at the high street bellwether next year as Sir Stuart Rose steps back to a non-executive chairman role. Yesterday, the chief executive of Morrisons said: "This [M&S] is simply an opportunity that passed by that I could not miss." Mr Bolland added: "I am totally committed to the business to the last moment." The former chief operating officer at Heineken, who took the helm at Morrisons in September 2006, will remain at the grocer until 31 January.
His comments came as Morrisons unveiled underlying sales up by 4.3 per cent for the 13 weeks to 1 November, down substantially from 7.8 per cent growth in the first half as inflation fell.
Asda and Sainsbury's last week also blamed falling food price inflation for a drop off in their latest quarterly sales. Morrisons said that food price inflation fell by 2 per cent in the grocery market between the second and third quarters.
Mr Bolland said: "We have seen commodity prices ease over the quarter quite strongly. Wheat is down by 20 per cent, meat has been slightly deflationary and potatoes are down 15 per cent." Reflecting the cheaper prices in stores, he said that customers were buying a greater proportion of fresh food than tinned items.
Sir Ian Gibson, the non-executive chairman of Morrisons, said he hoped to appoint a new chief executive early next year. He said: "We have got a strong team with talented, motivated colleagues across the country and a management team at the top who is well-equipped to deal with the transition. The board will be working to find a suitable successor and that process is already under way."
City analysts have cited Richard Pennycook, the finance director at Morrisons, as one of the strongest internal candidates to become Morrisons' next chief executive. Yesterday, Mr Pennycook said he would consider taking the role. "Obviously, the news of his departure is only very recent. I haven't had a chance to think about it yet, but I will."
Dave McCarthy, analyst at Evolution Securities, said: "For the moment, Mr Pennycook is a great candidate. We would be perfectly happy if he was made chief executive. There are a lot of good internal candidates."
He added: "I think there is more to the Morrisons story than just Marc Bolland, although he is a charismatic leader."
Morrisons' total sales, excluding fuel, were up by 9.1 per cent in the third quarter, driven by a record average of 10.8m customers a week during the period. Its sales were also boosted by a strong performance in the south of England and the new stores acquired from the Co-operative Group and Somerfield.
Mr Bolland is expected to join M&S in the first half of next year. Yesterday he said: "I really enjoyed my time at Morrisons enormously, it's been a terrific three years. The business is in great shape and I'm sure my successor will take the business forward because the strategy is clear and the success is there."
External candidates being floated to take the helm at Morrisons include Sainsbury's Dido Harding and Mike Coupe, Asda's Darren Blackhurst and Andy Clarke, Tesco's Richard Brasher, and Stefan Barden, the chief executive of Northern Foods. John Browett, the chief executive of DSGi, who was highly regarded at Tesco before joining the electricals retailer, may also be approached.Reuse content