Grocer Morrisons battles in tough climate

Shopping trolleys stand outside a Morrisons supermarket in Liverpool, northern England. Photo: Phil Noble

Shopping trolleys stand outside a Morrisons supermarket in Liverpool, northern England. Photo: Phil Noble

Published May 7, 2015

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London - Morrisons, Britain's No. 4 grocer, posted a deteriorating fall in underlying sales on Thursday, further illustrating the tough turnaround task facing its new boss.

The Bradford-based group which trails market leader Tesco, Wal-Mart's Asda and Sainsbury's in annual sales, said sales at stores open over a year, excluding fuel, fell 2.9 percent in the 13 weeks to May 3, the firm's fiscal first quarter.

That compares to analysts' forecasts of a decline of about 3 percent and a fall of 2.6 percent in the fourth quarter of Morrisons' 2014-15 year.

The update is the first presided over by Chief Executive David Potts, who succeeded the sacked Dalton Philips on March 16.

Morrisons said it anticipated that underlying profit before tax will be higher in the second half than the first but gave no further guidance.

Ex-Tesco executive Potts has hit the ground running, axing the majority of the management team he inherited a week after joining.

He has since announced plans to cut head office staff by 720, at a cost of 30-40 million pounds ($46-$61 million), while adding 5 000 shop floor staff to improve customer service.

Potts has also brought back staffed express checkouts and jettisoned the previous management's computerised queue management system.

“Our priorities are to improve the customers' shopping trip and make our core supermarkets strong again,” he said.

“We are listening hard to customers and colleagues and, wherever possible, we are responding quickly.”

Potts said he will provide a detailed update on his strategy when Morrisons publishes first half results in September but said the focus would continue to be “to invest more for customers in order to build trading momentum”.

Morrisons also said it had appointed Darren Blackhurst as group commercial director. Blackhurst joins from Kingfisher's B&Q and formerly worked for Matalan, Asda and Tesco.

Reuters

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