Partner Article

Profits offset sales fall for supermarket Morrisons

Supermarket group Morrisons reported a fall in like-for-like sales down 0.9%, compared with a 2.2% rise between the previous two quarters.

Despite this profits rose by 1% to £445m and exceeded business expectations and there were encouraging changes in the company, such as new store formats in 45 sites.

The basic savers food range also performed well, with a 40% rise in ‘M savers’ sales to make the value brand the fasting growing own label.

Food sourcing from Winsford and Grimsby showed “good progress” on growing manufacturing capabilities, and plans to launch Morrisons online in the next half are going ahead, which will include the “Morrisons Cellar” wine range.

Further plans for changes in the supermarket chain include the new “M local” format, which will launch smaller convenience stores on localised sites.

Dalton Philips, Morrisons’ chief executive, said: “Although the sustained pressure on consumer spending was reflected in our like-for- like sales performance, we have made further good progress against our strategic objectives - the building blocks which are the foundations of the future success of our business.

“By the end of the year our new Fresh Formats will be in over 100 stores and we are now ready to launch our convenience stores in London supported by our new distribution centre. We have also extended our food production capabilities and will launch wine as our first online category.”

Morrisons have expectations to improve in the latter half of 2012 after being awarded “Grocer of the Year” and “Employer of the Year” in The Grocer Gold Awards.

The business’s non-executive chairman, Sir Ian Gibson commented: “With ongoing commodity inflation continuing to weigh on already fragile consumer confidence and market conditions becoming ever more challenging, we have had to work even harder for our customers during the first half.

“Against this backdrop, Morrisons has increased sales and underlying earnings and delivered good dividend growth.”

Morrisons presented an optimistic outlook for 2013, and said that despite economic challenges, it expects to reach its targets.

This was posted in Bdaily's Members' News section by Miranda Dobson .