Grant O’Brien, the CEO of Woolworths Australia, is to end his 28-year career with the retailer after announcing his decision to retire.

O’Brien, who has been chief executive of Woolworths since October 2011, said he will continue to serve in this role until a successor is found. A global executive search process, including external and internal candidates, will now begin, the company said.

Woolworths chairman, Ralph Waters, paid tribute to O’Brien for his "commitment" to the company. "On behalf of the board, senior management and staff, I would like to thank Grant for his ongoing contribution and for his willingness to stay at the helm until we appoint a successor."

While also providing a trading update, Waters acknowledged the company’s recent "disappointing" financial performance, and said it was "committed" to the plans and strategies outlined at its May investor day.

Woolworths said it is on track to exceed the forecast of US$500m in cost savings across FY15 and FY16, but admitted general merchandise sales continue to be impacted by the group's ongoing transformation plan. This includes the introduction of a new merchandising system, the launch of which has created stock availability issues in stores, which in turn has impacted sales.

For the full year, the retailer is expecting net profit after tax before significant items broadly in line with the prior year, which was $2.45bn.