Morrisons top bosses were lambasted by the company’s founding family at the annual shareholders’ meeting for their running of the business, which slumped to a £176 million loss in 2013.

Leading the attack was former company supremo, and son of the founder, Sir Ken Morrison, who stood down as chairman in 2008 after 55 years with the business. During his tenure Morrisons became the UK’s fourth largest supermarket.

Sir Ken dismissed an upbeat presentation of a six-point recovery plan by chief executive Dalton Philips as “bull****” and likened Morrisons’ annual report to the fairy stories read to him as a child.

To loud applause, Sir Ken, who took up farming after retiring from Morrisons, said: “When I left work and started working as a hobby, I chose to raise cattle. I have something like 1,000 bullocks and, having listened to your presentation, Dalton, you’ve got a lot more bull**** than me.

“The results were described by the chairman and chief executive as ‘disappointing’. I personally thought they were disastrous.”

Sir Ken said he doubted the ability of the current board of directors, led by Sir Ian Gibson who announced he was standing down at next year’s AGM, to deliver a rapid and sustained recovery.

He recalled warning the board at the 2009 and 2012 AGMs about focusing on non-core activities rather than the supermarkets and said his prediction that this would seriously damage the business had been proved right.

Chris Blundell, Sir Ken’s nephew who was Morrisons director for 23 years until 2005, said the family was very disappointed with its performance and issues in the core business which were at the root of Morrisons difficulties.

He welcomed Sir Ian Gibson’s decision to stand down and urged the board to recruit someone with extensive retail experience to succeed him – saying he didn’t believe any of the existing board was capable of taking over.

Referring to the state of the business, Mr Blundell said: “This is a rescue situation which needs tackling urgently.”

Morrisons had performed worse than anyone in the retail sector and its once strong reputation among suppliers for being ‘firm but fair’ was tarnished.

“Reputation is everything in business and I think we’ve lost that as a business,” said Mr Blundell.

While Sir Ian apologised to the 200 or so shareholders attending the meeting for the company’s poor 2013 performance, Dalton Philips stressed that bosses had a clear strategy for recovery and to ensure Morrisons could succeed in an ever-changing retail marketplace.

He said the strategy had won the support of major institutional shareholders. It focused on pricing – including the £1 billion of price cuts announced last month which would lower profits over the next three years; addressing the continued growth of discounters like Aldi and Lidl, growing the new online operation which was expanding ahead of schedule and increasing the number of convenience stores.

He said: “We have a focused plan and our job is to deliver against this plan and put Morrisons back on a winning streak.”

Sir Ian said 2013 has been another challenging year in a rapidly changing grocery market. Turnover fell by two per cent, like-for-like sales were down 2.8 per cent and underlying profit was down 13 per cent at £785 million, while Morrisons reported a statutory pre-tax loss due to one-off costs of £176 million.

He said: “We know we have much to do in modernising but we should be performing more strongly in supermarkets and I apologise on behalf of the board that we didn’t. We are in a period of profound and permanent structural change and have taken steps to position Morrisons for long term sustainability and success.”