Veteran Morrisons founder hits out at the board: 'Your strategy is a load of bull'

Struggling chain must go back to basics, he says, as CEO is humiliated

Sir Ken Morrison and members of his family yesterday launched a sustained attack on the board of the struggling supermarket they once controlled and ran, in astonishing scenes at the company's shareholder meeting.

He attempted to humiliate chief executive Dalton Philips in front of hundreds of shareholders at the company's Bradford offices, calling the boss's strategy "bulls***" and hinting that he wanted the entire board to resign.

His nephew, Chris Blundell, who controls most of the remaining family stake in the supermarket, also told the board it needed rescuing, and welcomed the decision by chairman Sir Ian Gibson to leave the business next year after months of pressure.

Yorkshireman Sir Ken said: "When I left work and started working as a hobby, I chose to raise cattle. I have something like 1,000 bullocks and, having listened to your presentation, Dalton, you've got a lot more bullshit than me.

"The results were described by the chairman and chief executive as 'disappointing'. I personally thought they were disastrous. I warned in 2009 and 2012 that changes being implemented by directors would seriously damage the business and I'm extremely sorry to admit that my comments, whilst unwelcome, were absolutely right and today we have seen the consequences."

The 82-year-old, who built the business from a small family concern into the UK's fourth-largest chain over 50 years before stepping down in 2008, has hit out at the current management before but most observers agreed yesterday was his harshest critique.

After the meeting he refused to back Mr Philips and the board, arguing that the company must go "back to basics".

Morrisons suffered a £176m loss last year, and in March unveiled £1bn in price cuts in a bid to claw back customers amid diving sales.

Sir Ken was joined in his attack on management by Mr Blundell, who used to work for Morrisons too.

He said: "I think we're in a rescue situation here and it needs urgent action. Things need to be done very quickly. We are losing our reputation. A reputation is everything in business and I think you've lost that to a great extent."

A clearly shaken chairman Sir Ian said the strategy was the right one and would soon show results.

He added: "To say we are in a rescue situation – I'm sorry that's nothing but wrong. It is a very sound business and in the process of still growing."

The meeting started sombrely with both chairman and chief executive apologising for the poor performance over the last 12 months, which has seen 40 per cent wiped from the share price.

The company has been losing out to discounters Aldi and Lidl and to its traditional rivals Sainsbury's, Tesco and Asda due to its lack of online business or convenience stores, which they have recently launched.

However, after the meeting Mr Philips and Sir Ian attempted to play down the attacks, pointing out that they had both been re-elected by the vast majority of shareholders, including all top 20 institutional investors. Mr Philips said: "There is a well-documented difference on strategy between Ken and myself and I don't want to get drawn into a tit-for-tat exchange. My job is to deliver our strategy outlined to shareholders."

Sir Ian said he had not been put under any pressure to resign and that he was stepping down after eight years to avoid any further speculation.

He added: "I had to go within the next two years [under stock market rules] and this was the perfect opportunity. This was a debate with me and my board."

Mr Philips is cutting prices to the tune of £1bn over three years in the face of the exodus of shoppers to discounters like Aldi and Lidl. He has previously countered Sir Ken's criticisms of his management by pointing out that when he arrived, parts of the supermarkets group were 20 years behind the times, with cash being counted by hand in shops at the end of the day and stocktaking done with pen and paper.

The chairman's departure was seen as taking some of the heat from Mr Philips. Some in the industry are predicting the company could soon fall prey to a private equity takeover.

Analysis: 'Like shooting fish'

Attacking the current Morrisons' board in front of long-term shareholders, at the supermarket groups's AGM yesterday in Bradford, was, for founder Sir Ken Morrison, like shooting fish in a barrel.

However, despite poor sales figures, institutional investors are looking to CEO Dalton Philips to turn Morrisons' poor fortunes around.

In the wake of ally Sir Ian Gibson's departure, the onus is on Mr Philips to make significant improvements over the next year, before a replacement arrives.

Simon Neville

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before