The future of troubled supermarket giant Tesco (LSE: TSCO) is far from assured but at least new boss Dave Lewis has a plan to turn things round.
I wish I could say the same about its even more troubled rival WM. Morrison Supermarkets (LSE: MRW). It urgently needs a Dave at the helm (everybody needs a Dave) because after another dreadful Christmas, its in danger of disappearing off the radar.
It has an opportunity with the news that chief executive Dalton Philips will be stepping down after the final results are published in mid-March.
Morrisons share price has fallen 38% since he was appointed five years ago, although it recovered 6% of that when markets learned that he was leaving.
Philips was certainly right to walk the plank, after a miserable 3.1% drop in like-for-like sales over the key six-week Christmas trading period, a notably worse performance than its rivals.
NoMore Steady As She Goes
That wasnt the only disappointment. While Dave Lewis is taking drastic steps to turn Tesco around, selling private jets, shutting stores, closing the HQ and terminating the final salary pension scheme, Morrisons has been far more modest.
The biggest disappointment in its results was the decision to close just 10 loss-making stores, against 43 at Tesco plus another 49 cancelled openings.
One of few things Morrison could boast about was its property portfolio. It is selling 500 million of property assets this year, but could have done a lot more to help boost the numbers.
If the board appoints the right replacement for Philips, it might still happen.
Morrisons needs more than fiddling at the edges, it wantsa complete brand overhaul.
It seemed to rise from nowhere, only to lose its way, and unless it wants to return to nowhere drastic action is required now. News that it has finally completed one million internet orders just felt too little, too late.
Trouble In Store
Be warned, if Morrisons gets its very own drastic Dave, investors may not like the results.
By far the most tempting reason to invest in Morrisons is its storming yield, currently around 7%. Management has pledged to defend that, while Tesco slashedits dividend by 75% and completely scrapped the final payout.
While I would hate to see such a juicy income stream get the chop (highly likely under new management) it might be a price worth paying if it was part of an aggressive recovery plan.
Right now, we dont know who will replace Philips. That doesnt worry markets today, they are just pleased that someone will.
Lets hope the new boss has a free hand to carry out radical surgery, a la Lewis. Otherwise Morrisons faces a lingering death.
I wouldn’t want to bet my retirement on a risky stocks like Morrisons, but there are plenty companies I would consider.
The stocks listed in this special wealth creation report, top FTSE 100 stocks that could help you retire in comfort, are all ideally placed to deliver long-term wealth over the years ahead.
The Motley Fool’s 5 Shares To Retire On don’t just offer long-term growth, but juicyyields of more than 4% as well.
If you’d like to find out the identityof these five top companies, and how their shares could fuel yourretirement, simply click here now for instant access.
Get FREE Issues of The Motley Fool Collective
Get straightforward advice on whats really happening with the stock markets, direct to your inbox. Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio wealth.