“Leadership is fundamental to investors,” Enda Joyce, head of the corporate and consumer practice, at communications consultancy Hanover, says. “The chief executive is the main spokesperson for any retailer and they have to build trust with all key audiences – including consumers, investors, regulators and journalists.” Thus, when a business either needs to signify to its investors that it is enacting a shift in business practice, or that it is responding to a crisis, the CEO is likely to be the key figure.

Such was the case yesterday when Morrison’s announced the removal of CEO Dalton Philips after four years with the company. The move follows a decline in profits over the last five years with a 3.1% decrease compared to the other three of the big four retailers during the Christmas period.

The move is yet another signifier that the British supermarket sector is in deep trouble. Competition from inexpensive European retailers and from upmarket options like John Lewis and M&S Food has forced Sainsbury’s, Morrison’s, Tesco and ASDA to make changes. Discounters Aldi and Lidl were just ranked highest in YouGov's BrandIndex scoring. Tesco’s problems multiplied when it miscommunicated financial results to shareholders in August, prompting a media relations response and top-level sackings. (For more on Tesco, read our November/December feature)

Joyce says the big four will have to reconsider their brand positioning to rebuild trust, “What is clear is that the threat from discount providers, such as Aldi and Lidl, will not go away. Their market share will continue to grow, even as the economy recovers, as consumers feel comfortable buying certain products at the lowest possible cost. The big four supermarkets need to be very clear about where they want to position themselves and take the resulting tough decisions.”

While the consumer reputation relies on the culture of the business alongside things like loyalty schemes and online delivery, the corporate reputation is down to how investors and business partners perceive a company. Joyce adds, “Investors will only trust the big four supermarkets when they have determined how to position themselves in a fluid market and shown they can respond effectively to the threat posed by discounters.”

That repositioning will rely on a solid communications strategy designed to rebuild trust between the business and its stakeholders. Thus the new CEO of Morrison’s will be charged with leading that change. “The new chief executive will need to be very clear on their strategy and how it will be executed. Both will need to be clearly communicated to assuage any doubts about Morrisons’ viability,” Joyce points out.

New Tesco leader, Dave Lewis, has taken, thus far, been heavily involved in the communications campaign following the news of the financial scandal. With Tesco’s share price at nearly a year low and Morrison’s struggling as of late, investors will have to be reassured that changes are being made that will allow Britain’s retailers to remain competitive and economically viable in a more competitive market.