Steve Johnson has just landed what some consider the toughest job in retail — turning around Woolworths.

The struggling stores chain today unveiled Johnson as its new chief executive on a salary of £550,000 a year plus bonuses.

City analysts say the 44-year-old will have earned every penny if he comes up with a strategy for rescuing the moribund brand.

Once a staple of the High Street, Woolies has been buffeted by changing trends and the rise of the internet. It saw sales sink a further 6.7% in the six weeks to 26 July.

Previous chief executive Trevor Bish-Jones was ousted, leaving chairman Richard North temporarily in charge. Johnson ran Focus DIY for four years until July 2007. He has also worked for GUS and Asda.

North believes the way forward is to concentrate on the smaller and medium-sized stores. He also abandoned plans to offload
2 entertain, the DVD publishing arm.

Woolies, which has 800 stores, has issued five profit warnings in the past three years.

Johnson said: “Woolworths is a well-loved High Street brand operating in attractive markets, while the EUK and 2 entertain businesses have grown to hold market-leading positions in their respective markets.” The shares stood at 7.2p today.