Struggling Morrisons hit by staff exodus

The turmoil engulfing Britain’s private equity-owned supermarkets is intensifying as Morrisons grapples with an exodus of senior management and Asda scales back long-term investments to try and fix growing problems on the shop floor.
Seven senior directors have left Morrisons over the summer, among them convenience director Miles Foster, property director Mark Nowak and productivity director Jonathan Bell.
Almost a third of the top 60 employees working for the Bradford-based supermarket chain have now left since chief executive Rami Baitiéh took up his post last November. The vast majority of those departures have been resignations.
Morrisons has struggled since being taken over in a £7 billion leveraged buyout by US private equity giant Clayton, Dubilier & Rice (CD&R) in 2022. The retailer, which is now saddled with £4 billion of debt, is understood to have lost 23 per cent of its customer base over the past three years.
Baitiéh is seeking to rebuild market share by focusing on product availability and improving how customer complaints are dealt with. Morrisons’ sales increased by 1.4 per cent in the 12 weeks to August 4, although that was below the market growth rate.
The other executives to have departed recently include media director Sophie Bayer, non-food category director Tony Fearon and two people directors, Inji Duducu and Charlie Field. Sources believe supply chain director Lauren Lepley, who has been out of the business for weeks, could be the next to leave.
The senior staff left despite being eligible for a management incentive plan that will pay out when the private equity firm sells the business.
Morrisons said the number of departures last year across its “165-strong leadership team” was in line with historic levels and that the business was performing well. “Those who have left have been replaced with internal promotions, external hires or a reallocation of responsibilities,” a spokesman said.
Meanwhile, Asda — bought by the billionaire Issa bothers and the London-based private equity firm TDR Capital for £6.8 billion in 2021 — is slowing down its convenience store openings and slashing capital expenditure to redirect funds to fixing problems on the shop floor.
Since announcing in December 2022 that it planned to open 300 convenience stores by the end of 2026 — a key plank of co-owner Mohsin Issa’s plan to grow the business — Asda has opened shops at just nine sites. The supermarket chain was planning to open about 30 this year, but that target has been scaled back to just 12.
An Asda spokesman said that the company still plans to open 300 stores “in the medium term” and that it has identified a pipeline of 100 sites.
Asda, now majority owned by TDR, has slashed its capital expenditure budget for this year by £100 million — redirecting the money into improving the availability of its goods, making the stores cleaner and reducing the length of check-out queues. Capital expenditure is being cut to between £350 million and £370 million.
Poor store standards, partly driven by a highly disruptive change in IT systems, have contributed to a 6 per cent drop in sales over the past 12 weeks.
Chairman Lord (Stuart) Rose said this month that he was “embarrassed” by Asda’s performance and that it was time for Issa to step back from his operational duties.
Former Morrisons boss David Potts, whose non-compete agreement lapses in November, is seen as one of the leading contenders to take over at Asda.