Woolworths chief executive Grant O'Brien stood down on Wednesday after three-and-a-half years in the role and 28 years with the company.
“At the recent investor day we set out clear strategies to grow our business over the next three years and we have been working hard to execute these plans,” he said in a statement.
“However, the recent performance has been disappointing and below expectations. I believe it is in the best interests of the company for new leadership to see these plans to fruition.”
Last week O'Brien outlined announced a strategy to turn the business around by slashing capital expenditure and costs and pouring the savings into lowering prices.
Woolworths shares have fallen 12.5 per cent to $26.84 in the year to date and 25.3 per cent over the last 12 months as investors are concerned about competitive threats from key rival Coles, owned by Wesfarmers, as well as foreign giants Aldi, Lidl (expected), and Costco Wholesale Corp.
Woolworths, which operates the country's largest supermarket chain by store numbers, expects to deliver a flat full year profit for 2014-15 in line with last year's result of $2.45 billion.
Expected cost savings of $500 million in 2015-2016 are expected to be exceeded, with the loss of about 1,200 jobs.
Woolworths chair Ralph Waters thanked O'Brien for his years with the company.
O’Brien will remain at the company for a smooth transition until a successor is found via a global search.
