Morrisons' like-for-like sales down 7.1% in first quarter
The company said the market had “continued to be competitive” in the 13 weeks to 4 May 2014 and as a result it has cut prices permanently on over 1,200 essential items as it looks to compete with rivals. It is also planning to realise savings of £1 billion over the next three years to strengthen the business and reinforce the core customer proposition.
Morrisons’ sales have been suffering of late due to its lack of a significant online and convenience store business. However, today the company said it is on track to meet its target of having up to 200 convenience stores open by the end of the year and that its online grocery business launched last year is performing ahead of expectations.
Despite the trading environment remaining “challenging”, Morrisons said its financial outlook is unchanged - it expects to deliver underlying profit before tax in the range of £325 million - £375 million for the full year.
During the quarter, Morrisons opened two core supermarkets as well as 11 M local convenience stores. In addition, its online grocery business will make its first deliveries in London from 12 May after a successful launch phase in Warwickshire and Yorkshire.
Morrisons said its online business is set to reach up to 50% of UK households by the end of the year and, together with convenience business, is expected to account for over £500 million of annualised sales.
Dalton Philips, Morrisons’ chief executive, added: "The plans we set out at our results in March are on track. The reaction of our customers to the 1,200 "I'm Cheaper" price cuts we announced last week has been very positive. Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers."
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