David Potts, the retail veteran who steered the supermarket chain Morrisons into private equity ownership, is stepping down after nine years as chief executive.
He will leave in November, and be succeeded by the former head of the Carrefour France grocery chain, Rami Baitiéh.
Potts’s departure comes a little more than a year after the £7bn takeover of the retailer by the US private equity firm Clayton, Dubilier & Rice (CD&R) cleared its final regulatory hurdle after an intense bidding war.
Morrisons said Baitiéh would “work closely with David Potts to ensure a smooth handover period”.
Sir Terry Leahy, the former boss of Tesco who is now a senior adviser at CD&R, thanked Potts for his “nine years of dedicated service to Morrisons” and its customers.
Praising Potts’s “extraordinary service”, Leahy said he had “skilfully led the renewal of the Morrisons brand as well as navigating several twists and turns during his tenure, including the Covid pandemic and the cost of living crisis”.
He said Potts left the company “poised for growth”.
The group’s most recent annual results, released in March, showed it slumped to a £1.5bn loss during its first full year in private equity ownership.
A substantial portion of the £1.5bn pre-tax loss for the period was related to finance costs of £593m, which included interest payments on external debt, as well as interest on its lease liabilities and interest payable on loans to group companies.
Potts said his tenure as Morrisons chief executive had been “the privilege of my working life”.
He said he and Leahy had had “several conversations about succession since the buyout in 2021”.
Potts added: “We had a clear understanding that I was prepared to devote several more years to Morrisons if that was required, but that if an outstanding successor was identified who could lead Morrisons for the long term, then I would step down.”
Potts’s remuneration during his time as Morrisons chief executive drew criticism over several years, particularly after a pay rise resulted in him being awarded a total pay package of £5.3m for 2017, a significant increase compared with a salary of £2.8m in 2016 and £2.3m in 2015.
His pay rose again to nearly £6m for 2018, and remained above £4m in the final years of the supermarket’s time as a public company.
His remuneration returned once again to the spotlight in June 2021, when Morrisons shareholders voted overwhelmingly against the award of millions of pounds in bonuses to Potts and other executives who missed profit targets during the pandemic.
A spokesperson said at the time that the executive team intended to collect their awards in full, and Potts’s £1.7m bonus for 2020 took his total pay packet to £4.2m.
However, accounts filed since the company’s takeover by CD&R show that its highest-paid director was awarded £1.7m in total for the year to the end of October 2022, the company’s first 12 months after being taken private, less than half the £4.3m reported for the previous year.
Potts said on Wednesday he intended to take a short break with his family before looking for “further ways to “contribute to business and to the UK’s economic recovery from the pandemic”.
The announcement of his departure came as Morrisons reported a fifth consecutive quarter of like-for-like sales growth over the 13 weeks to the end of July, which the supermarket attributed to its lower prices and new loyalty scheme.
Leahy said Baitiéh would bring “energy, innovation, and dedication to expanding Morrisons’ loyalty programmes and digital reach”.
Baitiéh, who was born in Lebanon before moving to France to attend university, left Carrefour, one of France’s largest supermarkets, in August after 28 years.
During his time at the grocer, he rose through the ranks, running its operations in several different countries including Taiwan, Argentina and Spain, before returning to lead the company in France in July 2020.
In recent months, he has documented his visits to French farms, food producers to about 1,600 followers on his Instagram account, as well as attending the opening match of the Rugby World Cup, being hosted by France.
Baitiéh will first need to get to grips with the dynamics of the UK’s grocery market, according to Victoria Scholar, the head of investment at the broker Interactive Investor, adding this would be “one of his first tests”.
“There will of course be major similarities but also differences between the supermarket sectors in France and the UK,” she said.
She added that Baitiéh would be tasked with trying to rebuild Morrisons’ share of the grocery market, after it pushed into fifth place last year by the German discounter Aldi, amid a supermarket price war in which its rivals are jostling to attract cash-strapped consumers.
Baitiéh said he intended to help Morrisons “build on the strong links the company has with its loyal customers and the communities where it operates”.
