Morrisons has announced mixed interim half year results with a 2.3 per cent rise in turnover and a dip in profits, saying its progress is “steady” despite difficult trading conditions. Like-for-like sales, excluding VAT and fuel, were down 0.9 per cent compared to the 2.2 per cent increase for the same period last year, and pre-tax profits dropped £9 million to £440m.
The British retailer said that like-for-like growth was affected by historic levels of new grocery store openings in the UK at a time when consumer spending is low, coupled with “consumer pressures”. Customer numbers dropped by 1.8 per cent on a like-for-like basis, with fewer items in the shopping basket than in the previous period, on average.
The UK's fourth-largest grocery retailer by market share, Morrisons will seek to close the gap between its competitors with the rolling out of the M local convenience format and the launch of its e-retailing website. Earlier this year the retailer said it was to invest £100m in its convenience and online offer. The results announcement today was coupled with the news that the new retail format will launch in London and will be supported by a new convenience distribution centre in Feltham. So far this year, new store openings have contributed 2.2 per cent of turnover.
The second half of the year will see the launch of its online offering, Morrisonscellar.com, which will sell wine by the case. The roll-out of a full online offering has not yet been revealed but it is not expected to launch until 2013/14.
Morrisons said it expects the tight economic conditions to continue and has developed its financial plans accordingly. CEO Dalton Philips said:, “Although the sustained pressure on consumer spending was reflected in our like-for- like sales performance, we have made further good progress against our strategic objectives – the building blocks which are the foundations of the future success of our business. ” (6 Sept)
© 2012 - ESM: European Supermarket
