Thursday, February 21, 2019

Morrisons sales slip yet again in third quarter


Morrisons‘ sales fell for another consecutive quarter, as Britain‘s fourth largest supermarket faces rivalry from the other grocers.

In a trading update this morning, the supermarket giant said prices fell 2.2% in the quarter due to a combination of general food deflation (food prices were down 2.5% in the year to September) and its own commitments to lowering prices. 

In an attempt to simplify its offering, Morrisons reduced amount of vouchers it handed out to customers, hurting sales by 2.4%.

Morrisons boss David Potts remains sanguine, citing that profit in the second half of the year should be higher than the first, when it generated a pre-tax profit of £126m.

“The business is moving at pace on the long journey towards improving the shopping trip for customers,” commented Potts.

“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.”

“If Morrisons is to make up for its first half shortfall, it will need to pull out all the stops in Q4 because Q3 was another quarter of lacklustre sales, says Phil Dorrell, a partner at consultancy Retail Remedy.

“We have seen nothing yet to understand how they are going to drive more footfall into their stores in this most important of all quarters. It feels like Morrisons has almost scaled back its marketing at a time when it should have been investing in big value messages.

Match and More is like Clubcard’s younger and less effective brother.

Christmas is coming and probably too quickly for David Potts and his team, yet the Morrisons full year profit forecast remains unchanged. They must know something we don’t.”