Member Article

Morrisons cautiously hopeful as it pits itself against German discounters

Bradford-based supermarket chain Morrisons is cautiously optimistic as third quarter results show a slight improvement on results, and plans by chief exec Dalton Philips commence, pitting them against German discount retailers Aldi and Lidl.

Interim results have reported that sales excluding fuel were down 6.3% for the third quarter compared to a 7.6% decline in the previous quarter.

Like-for-like transactions were down 3.3% compared to 5% previously and online contributed 0.7% to LFL during the period.

They have announced further investment in prices with the launch of ‘Match & More’, a price match and points card which provides a price guarantee against Aldi and Lidl as well as Tesco, Sainsbury’s and Asda.

The supermarket has expanded its convenience offering with 12 new M local stores and three new core stores, plus one replacement, and are reportedly on target for the opening 60-70 new M local stores by the year end.

A new online hub in Greater Manchester has been launched, and will be operational in Merseyside soon.

For the full year 2014/15 profit outlook, Morrisons reportedly expects underlying profit before tax to be in the narrower range £335 million-£365 million (previously £325 million-£375 million), after £65 million of new business development costs and £70 million of one-off costs.

The financial position of the Group remains strong, with net debt of £2.6 billion.

Progress on debt reduction is described as ‘encouraging’, and year-end net debt is expected to be £2.3 billion-£2.4 billion, £100 million better than initially guided and £400 million-£500 million lower year-on-year.

Dalton Philips, chief executive, said: “Morrisons is meeting the challenges created by a period of intense industry competition and structural change with quick and decisive action. I am encouraged by the further progress we have made, especially on a number of key operational measures, cash flow and costs.

“The launch of the Match & More card was another big move for Morrisons. We are the only supermarket that is price matching the discounters and the successful launch last month was a testament to the positive way our 120,000 colleagues are delivering innovation and embracing the changes at Morrisons.

“We look forward to the key Christmas period focussed on offering customers the best in quality fresh food and value for money that Morrisons is famous for.”

This was posted in Bdaily's Members' News section by Clare Burnett .