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Morrison Finance Director Ousted in Response to Lower-Than-Expected Profits

BRADFORD, U.K. -- The U.K.'s no. 4 grocer, William Morrison Supermarkets Plc, based here, has removed finance director Martin Ackroyd and named joint managing director Bob Stott its first c.e.o., in the wake of costs connected to the $6.24 billion acquisition of Safeway Plc, which turned out to be higher than management projections.

According to published reports, Ackroyd will stay on until a successor is found, and he will keep his place on the board of directors until the company's annual general meeting in May. Chairman Ken Morrison, during whose tenure the company's share price plunged 20 percent after the March 2004 purchase of Safeway, will remain. The cost of converting Safeway stores to the Morrison format has proved to be 50 percent higher than anticipated, while consumers have been slow to respond to the lower-price items added to steal share from rivals Tesco and Wal-Mart-owned Asda. One problem is that, although Morrison has cut prices by an average of 24 percent, its prices are still steeper than those of its competitors, said local market observers.

However, Stott said in a conference call detailing financial results for the last year that consumers are beginning to spend more at the converted Safeway stores, with sales at those stores up 9 percent, as opposed to a 6.8 percent decline in sales at core Morrison stores.

Net income went up 4.1 percent to 205.7 million pounds (US$388 million) from 197.6 million pounds last year, while 2004 profit before tax and exceptional items increased less than 1 percent to 321.1 million pounds.

Additionally, Morrison is appointing nonexecutive director David Jones deputy chairman "to ensure succession plans [are] in place for all board positions," and the board's only other nonexecutive director, Duncan Davidson, will resign.
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