Phelps leaves the retailer in June after 12 years, the last four of which have been as its drinks boss, as reported by OLN last week. He will join the Co-operative Group as head of ambient.
Newman has been internally promoted to the top post, moving across from her role as category planner for BWS.
In a statement sent to suppliers, Phelps said: “Hopefully you are aware that I have decided to leave Sainsbury's after 12 amazing years here, having joined as a graduate.
“The last four years running BWS has been amazing and I thank you all for your support. For those of you not aware I am joining the Co-Op as head of ambient and relocating to Manchester.
“Elizabeth has been at Sainsbury's for five years and has completed a number of roles, including insights for the whole of Sainsbury's food business and spent time as our news and magazines buyer. She joined the BWS team two and a half years ago, as the category planner, so is very aware of how it all works and many of you already know her.
“Before Sainsbury's, Elizabeth spent two years in retail customer research and seven years in the magazine publishing business.”