Boss of Morrisons delivers stark 'burning candle' warning to staff as he calls for urgent change

The new boss of Morrisons has delivered a stark warning to his workers that major changes are needed in order for the supermarket chain to survive.

Rami Baitiéh, 52, switched Paris for Bradford last month as he joined Morrisons from French supermarket giant Carrefour.

Speaking to his staff in an early briefing at the company's head office, he said businesses were like 'burning candles' which would burn out unless they changed, The Sunday Times reported.

Baitiéh, who has been described as a turnaround specialist at struggling companies, is said to be injecting a sense of urgency by laying bare the issues at Morrisons. 

According to one insider at the British supermarket chain, which employs 105,000 people, 'it was a gulp moment for everyone'.

The issues surrounding Morrisons relate back to 2021 when private equity giant Clayton Dubilier & Rice (CD&R) acquired the chain for £7billion before a steep rise in interest rates.

The deal has left Morrisons needing to pay £400m of annual interest payments on £6.6bn of debt.

In March earlier this year, it was reported that the company was haemorrhaging cash after their private equity buyout, racking up £1.5bn of losses.

Now, executives at Morrisons have been trying to warn staff how profits last year were not enough to cover the company's interest bill.

And with Aldi replacing Morrisons in the industry's 'big four', Baitiéh has insisted on weekly hour-long sessions on Google Chat where he shares what he has learnt and observed on his daily unannounced store visits.

He has also added his email address to the complaints section of the supermarket's website and shares the most alarming ones to his workers.

He informed staff that the two most important groups in Morrisons are buyers and store managers and more autonomy needs to be granted to them. 

Supermarkets across the UK have been struggling with UK's cost of living crisis. One particular area which has seen a rise is shoplifting. 

A total of 365,164 incidents of shoplifting were logged by police in England and Wales – 1,000 a day and the most since 2019, the Office for National Statistics said. 

The dramatic rise in shoplifting offences will come as no surprise to retailers, who have repeatedly warned of the threat posed to their staff by violent offenders and called for the police to take the issue more seriously. 

This led to the heads of 86 major retailers finding common ground in demanding action on the shoplifting crisis back in October, with theft said to be costing the sector nearly £1.8bn. 

Although Morrisons’ cashflow is improving with profits expected to come in at £1bn this year, there is growing expectation among industry sources that Baitiéh will be forced to make price cuts. 

Amid eye-watering levels of food inflation last year and after being undercut by rival supermarket chains, it looks to be a desperate time for Morrisons. 

Sales at the supermarket chain rose 3.7 per cent in the 12 weeks to the end of November, which was considerably lower than the broader industry. 

Baitiéh's key focus is said to be on improving in-store availability and driving up higher volumes, which will in turn generate cash so that prices can be cut and sales can rise.

To combat this, CD&R have been open to sourcing more fresh food from third parties.

The private equity giant is also hoping to deliver a capital injection by engineering a deal in which Motor Fuel Group acquires Morrisons’ 340 petrol forecourts. But, talks are said to be stalling at the moment.

During a long career at Carrefour, Baitiéh was sent to turnaround the fortunes of stores in easter Europe to Taiwan, Argentina and Spain. 

The approach of Morrisons has been similar to Rolls-Royce boss Tufan Erginbilgic who said the company is a 'burning platform' that needs to transform.