Sir Ken Morrison, the stalwart chairman of Wm Morrison, is this week set to put in motion plans for his departure after 54 years with the supermarket chain founded by his father.
Sir Ken, 74, told investors at the company's annual general meeting last year that he would spend the next 12 months deciding how to arrange his succession before reporting back to them at the 2006 meeting. Wm Morrison's AGM is on Thursday.
Although he stepped back to become executive chairman last year, the City is still keen to hear about Sir Ken's long-term plans as the search for a new chief executive continues.
Sir Ken joined the Bradford-based retailer in 1952 after finishing his national service. He oversaw one of the big retail success stories of the time, consistently delivering growth, but in the past two years the chain - and Sir Ken in particular - has come under fire from the City.
Soon after it completed its £3bn acquisition of its larger rival Safeway in March 2004, the chain started to flounder and put out a raft of profit warnings as it struggled to integrate the business. The shares toppled and the chain's poor corporate governance standards, up until then largely tolerated in the City, also came under fire. Non-executive directors were appointed and the managing director Bob Stott was made temporary chief executive.
But the City is still adamant that a new chief executive needs to be brought on board to take over from both Mr Stott and Sir Ken, and concerns have been raised that the ongoing presence of Sir Ken could deter potential candidates.
It is understood that three candidates are in the frame. These are Mark Bolland, the chief operating officer of the Dutch brewer Heineken; David Wild, a former Tesco executive and now head of Wal-Mart's German stores; and Ian Meakins, the outgoing boss of Alliance UniChem, the pharmacy chain that is merging with Boots.
An insider confirmed that Sir Ken would discuss his departure at the AGM, but also stressed he was unlikely to make his final decision on timing until the board meeting beforehand. "The only person who really knows is Sir Ken."
Although hopes are high that the chain could unveil its new chief executive at the AGM, the insider said that while the decision was "very close", the appointment was unlikely to be made by Thursday. "They won't quite be able to announce the chief executive, but Sir Ken is set to give a clear timetable on how his departure is going to be planned."
In a recent research note, Citigroup said it hoped the chain would announce the appointment of a new chief executive "at its AGM, if not soon afterwards". The bank is also predicting like-for-like sales, excluding petrol, to show growth of 3.3 per cent for the 16 weeks to 21 May.
"This implies a slight acceleration over the first seven weeks... as a result of the positive impact of [store] conversions and improving operational performance," the note continued.
Citigroup, which acts as a broker to Wm Morrison, has upped its rating to a "buy". But it warned that failure to appoint a new chief within the next few weeks would "provide disappointment".Reuse content