Morrisons chief executive Dalton Phillips is to quit following a dismal festive sales period in which its like-for-like sales for the six weeks to 4 January slipped by 5.2 per cent.
Phillips has been at the helm of the retailer for five years during which it has ceded ground to its rivals and failed to modernise its estate, missed the boat on online shopping and neglected to prioritise the convenience market.
Incoming Morrisons chairman Andrew Higginson, who will take over as chairman from Sir Ian Gibson, said Philips had managed the business"against a background of considerable industry turmoil and change."
He went on to say that new leadership was needed "to return to growth."
Phil Dorrell, director of retail consultants, Retail Remedy, said the figures show that Morrisons has been "steamrolled" by conditions in the gorcery sector.
"The departure of its chief executive was grimly inevitable. With the most dated stores and weakest business strategy of the old guard grocers, Morrisons has haemorrhaged both sales and share to the brash young discounters who took its cheap prices USP, improved it, and then unceremoniously yanked the rug from underneath it.”
Meanwhile, John Ibbotson of Retail Vision added: "Never have such poor results been so highly regarded. It's verging on the tragi-comic. Philips has been in the firing line for some time so it's no surprise he's on his way out.
"Late arrivals to online, convenience, a delayed incursion into the rich south, and hesitant leadership, effectively sealed his fate.”
Philips will exit following the supermarket's full year trading statement in March this year.
The supermarket chain recently succeeded Bupa as sponsor of the Great North Run in affort to turn around its flagging fortunes.