* Says has failed to get message across to consumers
* Commercial Director Richard Hodgson leaves business
* Q3 lfl sales down 2.1 pct, ex fuel vs f'cst down 2 pct
* Sees FY outcome "broadly in line" with internal
* Shares down 1 pct
By James Davey
LONDON, Nov 8 Britain's No. 4 grocer Wm Morrison
posted a worsening sales decline and parted company with
its commercial director, saying it had failed to get its selling
points across to consumers.
The loss of another senior executive comes as Morrisons
misses out on the sales growth of its three big rivals, Tesco
, Asda and Sainsbury, as well as
smaller players such as Aldi and Lidl.
The Bradford, northern England-based firm said on Thursday
that Richard Hodgson, recruited for the commercial role from
Waitrose two years ago, would leave immediately.
Martyn Jones, corporate services director, has been
appointed interim commercial director of the more than 450
stores group pending the recruitment of a successor for Hodgson.
Hogdson's exit follows that of marketing and operations
director Richard Lancaster who left in April. In June Morrisons
said finance director Richard Pennycook will leave the business
next June after eight years at the firm.
Chief Executive Dalton Philips said Morrisons had to do a
better job of telling customers about policies such as its
emphasis on in-store butchers, bakers, fishmongers,
cheesemongers and greengrocers and its focus on producing much
of the food it sells.
"I don't see us stepping up further our promotional
campaign, I see us stepping up further the communication of why
we are so different from the rest of the pack. I don't believe
that we've been getting that message over strongly enough," he
Total third quarter sales, excluding fuel, fell 0.4 percent,
though this is partly explained by Morrisons' lower level of
store openings compared to rivals as well as its lack of an
online food outlet and a significant convenience business.
Shares in Morrisons, down 14 percent over the last year,
were down 1 percent at 265 pence at 1011 GMT, valuing the
business at 6.3 billion pounds ($10.1 billion)
"We think the relatively slow rollout of new format stores
and online are red herrings. Morrisons is underperforming
because it needs to do its day job better," said Panmure analyst
Philip Dorgan, who sees downside to consensus profit forecasts.
Sales at stores open over a year, excluding fuel, fell 2.1
percent in the 13 weeks to Oct. 28, the firm's third quarter.
That compares with analyst forecasts of a decline of 2
percent, according to a company poll, and is weaker than the
0.9 percent fall in the first half.
Though sales were lower than anticipated, Morrisons said it
anticipated a full year performance "broadly in line" with its
expectations, helped by productivity improvements.
Though the UK is out of recession, many retailers are still
struggling as consumers are deterred by inflation, meagre wage
increases and government measures designed to cut national debt.
Last week electricals retailer Comet collapsed into
administration, threatening 6,600 jobs.
On Tuesday an industry survey said British retail sales
slowed sharply in October, while bellwether British retailer
Marks & Spencer posted a 3 percent fall in first half
"A third of the families that we talked to said they would
be consciously cutting back on (Christmas) presents this year,"
Consumers would be even more cost-conscious this Christmas
than in 2011, he said, and Morrisons would offer to feed a
family of eight for Christmas dinner "with all the trimmings"
for 2.49 pounds a head, down 15 percent on last year.