Woolworths has surprised all by ending chief executive Trevor Bish-Jones’ six-year run in one of the high street’s toughest jobs.
The retail chain, which has struggled to revive sales amid cut-price competition from supermarkets, said it had agreed with Mr Bish-Jones that it was the “appropriate time” for a change in leadership.
It praised Mr Bish-Jones for his significant contribution and said he would stay on for another three months while a successor is found.
Shares fell seven per cent after the change wrong-footed the City and sparked fears the company could be left without a chief executive at a challenging time.
First quarter figures showing a 2.2 per cent drop in like-for-like figures for the 19 weeks to June 14 added to the unease, although Woolworths said this was in line with internal expectations.
Including the company’s DVD and CD wholesale business, sales for the 19 weeks to June 14 were down 1.9 per cent on a year earlier.
Howard Wheeldon, a senior strategist at BGC Partners, said: “One has to feel a degree of pity that Trevor Bish-Jones is finally throwing in the towel.
“No one is about to fault him for trying his best since his appointment to the troubled group in March 2002. Coming from Dixons where he had successfully managed Currys for years he had all the experience necessary to attempt a Woolworth revival.
“But it wasn’t to be. Woolworths found itself at the wrong end of the market spectrum and unable to get back into fashion.”
Tighter control of costs helped the retail arm return to the black in April, despite a 3.2 per cent fall in like-for-like sales in the year. The company trades from more than 800 sites.
Woolworths said that margins came under pressure during the first quarter of its new financial year, mainly because it generated a greater proportion of sales from entertainment products, rather than higher margin sales of warm weather outdoor products and clothing.
It added that its Price Drop promotional campaign would also impact on margins, although this has been offset by a boost to sales volumes.
The company predicted its Price Drop and the Woolworths Worthit! ranges would be attractive to shoppers during the current economic slowdown.
It said: “Going forward, we remain cautious about the consumer economy as we believe that the spending power of many consumers will be reduced by a number of factors including rising energy and food prices. This underlines the importance of the work we are doing to improve our value credentials.”
Chairman Richard North also paid tribute to Mr Bish-Jones: “Trevor has been with Woolworths for six years. In that time he has been a tireless chief executive and has made a very significant contribution to the group.
“It has been agreed between the board and Trevor that this is an appropriate time to seek new leadership for the business.”
Meanwhile, supermarket chain Waitrose continued its recent expansion by announcing an agreement to acquire four sites from Woolworths.
Waitrose said it expected to attract up to 200,000 new London shoppers as a result of the stores at Chiswick, Clapham, Edgware Road and Islington.
In three years Waitrose has acquired 43 branches, including the recent addition of Budgens food shops in Buckingham and London’s Bayswater, as well as a Co-op at Brackley, Northamptonshire. It currently has 189 food shops in England, Scotland and Wales.
Up to 700 jobs will be created as a result of the expansion, which will see the shops converted in a phased programme ahead of Christmas.
Three of the four stores are smaller than the average Waitrose store size of 18,000 sq ft. Edgware Road has 21,000 sq ft of space, with the Chiswick site the smallest of the new additions at 9,000 sq ft.
Waitrose managing director Mark Price said: “These acquisitions will allow us to reach up to 200,000 new shoppers in the capital and will support our ambitious growth plans.
“We are delighted to add these prime locations to our portfolio of shops, particularly as they are sited in our heartland areas where Londoners have been requesting Waitrose branches for many years.”