Woolworths is almost certain to appoint a chief executive from outside the business as it eyes a radical reshaping of its store portfolio to halt declining sales.

First interviews are being carried out this week and next to find a candidate to succeed Trevor Bish-Jones, who leaves next month. But Retail Week has learnt that the chances of the job going to an internal candidate are “almost nil”, as the board seeks radical solutions to turn around the ailing chain.

“If an internal candidate was to be appointed, it would have happened already,” said one source close to the situation.

On Wednesday, the retailer revealed a 6.7 per cent fall in like-for-like sales in the six weeks to last Saturday, sending the shares to a new low of 5.5p. Woolworths revealed it would concentrate on its small and medium-sized stores for its recovery.

It is understood that there is a core of 500 to 600 shops in the 800-store business that are profitable, but that the remainder of the chain – comprising larger stores of more than 12,000 sq ft – performs badly because of a sprawling range and higher property costs. Four larger stores in affluent areas of London have been sold to Waitrose already.

Directors Tony Page and Steve Lewis have both been linked with Bish-Jones’s job since his departure was announced in June. However, it is felt by the board that some external impetus is needed. One possible scenario is that a chief executive is appointed internally for the retail business, reporting to the new group chief executive.

It is understood the board sees significant scope for improvements in availability, range, pricing and service in stores. If the retail business can be put back on track, it will enable the long-awaited split of Woolworths’ retail and wholesale divisions.

Chairman Richard North insisted that internal and external candidates were under consideration and blamed Woolworths’ woes on the difficult market.

“We want someone who will provide leadership, has a good strategic brain and can identify where the real opportunities are,” he said. “Trading is tough at the moment, but there’s still a feeling inside the company that Christmas will be OK.”

Wilko’s a winner as woolies wilts

Wilkinson has bucked the retail downturn to post pre-tax profits of£50.3 million for the year to February 1.

The retailer, which competes head on with Woolworths, upped its pre-tax profits by 4 per cent, according to figures filed at Companies House. Total sales, excluding VAT, climbed 9.5 per cent to£1.4 billion.

“These are good results,” said Retail Knowledge Bank senior partner Robert Clark. “Wilkinson is an attractive format that should benefit from a downturn.”

Clark said that Wilkinson could be well placed to take on some of Woolworths’ unwanted stores.