SYDNEY - Australian supermarket giant Woolworths said Wednesday its chief executive will quit and 1,200 jobs faced the axe after months of disappointing sales.
Grant O'Brien, who has been with the company for 28 years and has been chief executive since late 2011, recently set out a three-year plan to grow the business.
"However, the recent performance has been disappointing and below expectations," he said in a statement.
"I believe it is in the best interests of the company for a new leadership to see these plans to fruition." His retirement saw shares in Woolworths, which is one of the biggest supermarket chains in Australia along with rival Coles, climb 1.86 percent to Aus$27.34 by mid-afternoon.
O'Brien said the company was on track to exceed a forecast Aus$500 million (S$519 million) in cost savings but it would take time for the three-year strategy to produce results in sales.
Food and liquor sales were poor in December and January, still disappointing in April, and had failed to improve since.
Woolworths said it expected a net profit for the year of about Aus$2.15 billion after significant items while ongoing strategic change would cost about Aus$270 million, including up to Aus$50 million in redundancy costs.
"We now anticipate a total reduction of approximately 1,200 roles across support functions, supply chain and non-customer facing store positions," it added.
Company chairman Ralph Waters said the board remained committed to the three-year strategy announced in May but said any new chief executive would not have their hands tied.
"I don't think any CEO worth their salt would take the job with handcuffs on," Waters was quoted as saying in The Sydney Morning Herald.
"If they have a different view from the current strategy... they'd need to convince the board to change direction." O'Brien will remain in the job until a replacement can be found, with a search already underway.