Woolworths' board has called time on Trevor Bish-Jones's tenure as chief executive of the high street stores after more than six years of struggling to put the group back on the road to recovery.

Richard North, chairman of Woolworths, said the board had decided that now was an appropriate time for the company to find new leadership but insisted that the parting was entirely amicable. Mr Bish-Jones will leave with a year's pay in compensation. Last year, his total remuneration, including pension, bonus and benefits, was £799,000.

The announcement of Mr Bish-Jones's departure was made as latest trading figures from Woolworths showed that like-for-like sales were down 2.2 per cent for the first 19 weeks of the year to 14 June. Total sales were down 1.9 per cent, compared with last year.

Shares in Woolworths fell 0.55p in early trading to 9.23p.

Mr North said: "Trevor has been a tireless chief executive for almost all the time that Woolworths has been a separate listed company. I've been very pleased to have him as my chief executive and he has been responsible for some very significant things, including the complete reinvention of Entertainment UK [the company's DVD and music distribution business] and the refinancing of the business, which was not easy to pull off in last year's markets."

"It has been agreed between the board and Trevor that this is an appropriate time to seek new leadership for the business," Mr North added.

Mr Bish-Jones was credited with bringing Woolworths back from the brink earlier this year, when the retailer bounced back into the black with a profit of just £3.4 million against a loss of £12.9 million the year before. At the same time, however, investors were disappointed by a 66 per cent cut to the dividend.

The chief executive will stay on at the company for three months while the search for a replacement begins. Both internal and external candidates will be considered, the company said.

In its latest trading update, Woolworths said that its margins were being hit by pressure on costs and a mix of sales, which has seen lower margin entertainment products sell well, but higher margin warm weather outdoor products and clothing trade poorly.

Stephen East, finance director, said that the 2.2 per cent fall in like-for-like sales reflected the fact that Woolworths was promoting sales of higher ticket electrical items last year.

Mr East said that the sales performance was "commendable", considering the conditions on the high street and added that he hoped sales of outdoor goods would turn out to be stronger this summer, than last, if reasonable weather continued.

"Going forward, we remain cautious about the consumer economy as we believe that the spending power of many consumers will be reduced by a number of factors including rising energy and food prices. This underlines the importance of the work we are doing to improve our value credentials," the group said in a statement.

Woolworths rolled out a new price campaign nationwide last month, known as Price Drop, through which it has cut prices on 200 everyday goods including homewares, toys and batteries. It expects that hard pressed consumers will respond well to this value line, as well as its Worthit! range of cut-price products.

The retailer also used today's announcement to reveal that it had sold four London stores to Waitrose. The finance director said the sales were nothing to do with the economy and merely part of the ongoing re-evaluation of the retailer's property portfolio.

The stores were sold for £25.5 million and the net book value of the stores concerned is approximately £2.6 million. The profit on disposal will be treated as exceptional, the company said.

David Stoddart, an analyst at Altium Securities, said he would not change his forecasts following today’s update. He added: “Although margins are behind target, a normal weather pattern should see the shortfall recovered.”

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