William Morrison Supermarkets Plc has announced a review of its £9 billion property portfolio in a bid to uncover capital, after like-for-like first half store sales for the first six months to 4 August fell by 1.6%.
Total turnover of £8.9 billion was in line with last year, while profits before tax fell 21.8% to £344 million.
"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," the retailer said in a statement today.
"We anticipate an improvement in our sales performance during the second half and accordingly the Board believes the Group’s performance for the full year will be broadly in line with its previous expectations."
Noting that the company intends to manage its property portfolio 'more actively' in the future, the retailer said, 'Morrisons property portfolio has an estimated market value of around £9bn'.
'Whilst there are early signs that the UK economy has started to turn a corner, the grocery market continues to be a very challenging environment in which to operate', Morrisons said in a statement today.
'Over 90% of our estate is freehold, a considerably greater proportion than our major competitors. We expect to see the proportion of freehold properties reduce naturally as our convenience store programme expands'.
The retailer also placed a limit on the expansion of its new supermarket space to around 350,000 sq. ft annually from 2014/15 onwards. Morrisons launched 2800 own brand products during the half.
"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," Morrisons CEO Dalton Phillips said.
He added, "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.”
© 2013 - ESM: European Supermarket Magazine by Ellen Lunney
