Analysts say supermarket is moving in the right direction despite decline in sales over the latest quarter
Morrisons has insisted it is making “good progress” against its targets despite posting a sales decline in the latest quarter
Like-for-like sales excluding fuel fell 2.6% in the 13 weeks to 1 November, with the retailer pointing out that investment in lower prices brought 2.2% deflation in the period and 5.3% deflation on a two-year basis.
Morrisons also reduced the number of vouchers it accepted, whch hit third-quarter sales to the tune of 2.4%.
The company predicted that underlying pre-tax profit would be higher in the second half of 2015-16 than in the first, with net space sales growth of around 0.5% following the closure of 11 supermarkets and the sale of 140 M local stores.
Chief executive David Potts said: “The business is moving at pace on the long journey towards improving the shopping trip for customers. Our priorities for the rest of the year are unchanged – to stabilise trading, reduce costs and further improve the capability of the leadership team.
“We are making good progress in many areas and customers are noticing improvements.”
David Gray, an analyst at Planet Retail, said the numbers represented “limited progress”, but pointed out that it puts Morrisons behind key competitors Sainsbury’s and Tesco.
“Even so, credit must be given to Morrisons’ new management under David Potts for taking some tough but necessary decisions to protect the long-term profitability of the business – exiting convenience and the price comparison loyalty scheme, Match & More,” he said. “Both initiatives were a major cost and their removal will allow the chain to invest in the core proposition, hypermarkets and superstores. This after all is where Morrisons makes the vast majority of its sales and profits.
“Morrisons may be moving in the right direction under new management though this has yet to show in the numbers.”