Morrisons half year profits fall
Morrisons saw its underlying pre-tax profit fall by 10% to £401 million in its first half while turnover was flat at £8.9 billion.
In the half year to 4 August 2013, like-for- like sales fell by 1.6% as the supermarket saw a 1.3% drop in customer numbers. Total stores sales edged up by 0.8%.
In a trading statement, Morrisons said its plans to launch its own online grocery business in 2014 were on track after the signing of a long term service agreement with online grocer Ocado.
It also said that its 33 M local convenience stores were now trading and performing well and that the supermarket was on track to have 100 convenince outlet operating this year.
Chief executive Dalton Philips said he expects sales to improve in the second half of the year when more convenience stores are up and running.
However, Morrisons will limit its supermarket expansion to about 350,000 square feet a year from 2014-15, which was “slightly” less than half its average rate of growth over the last five years.
The company said: “We believe that, given the structural changes that are taking place in the UK grocery market, our future top line growth will be driven principally through our online and convenience channels, both of which are relatively capital-light compared to developing supermarkets.”
Commenting on the half year results, Philips said: "We have made significant progress in building our presence in the key growth channels of convenience and online. By the end of the year we will have 100 M local convenience stores, around half of which will be in London and the South East, and we've secured a new distribution centre in Bury to support our convenience stores in the North.
“In parallel we've been working at pace on our online offer; the final pillar of our strategy. Morrisons.com will be making home deliveries of our great fresh food by the end of January 2014, supported through our long term service agreement with Ocado.
“Whilst early indications of a recovery in the UK economy are encouraging, we are yet to see this impact on consumers’ pockets.
“We have therefore developed our financial and operational plans on the basis that there will be no significant change to the challenging economic environment in the near future.”
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