Morrisons has reported a slowdown in sales growth for its latest quarter, attributing the performance to a highly competitive market environment. The supermarket chain disclosed that total sales rose by 1.7% to £4 billion during the 13 weeks ending April 26, a decrease from the 2.6% growth recorded in the previous quarter. Like-for-like sales growth also decelerated to 2.2%, down from 2.8% in the prior quarter.
CEO Expresses Satisfaction Despite Challenges
Despite the slowdown, Chief Executive Rami Baitieh expressed satisfaction with the results, noting an encouraging start to the third quarter. He expressed optimism that upcoming events such as the World Cup and Father's Day would boost sales. The company emphasized its progress in executing its growth strategy, with a continued focus on value to attract shoppers.
Market Position and Competitive Landscape
Morrisons recently lost its position as the UK's fifth-largest grocery chain to discount rival Lidl, dropping to sixth place as its market share declined in recent years. Baitieh has been spearheading a major turnaround strategy aimed at enhancing sales and profitability. The company reported a 5.7% increase in underlying earnings to £323 million for the first half of its financial year.
Cost Savings and Expansion Plans
Morrisons secured an additional £48 million in cost savings during the quarter, moving closer to its £1 billion savings target as part of its long-term strategy. However, cost reduction efforts also led to the announcement of plans to close approximately 100 loss-making convenience stores last month, with the company citing government policy as exacerbating cost pressures. Despite this, Morrisons opened 30 new Morrisons Daily franchise stores in the quarter and plans to open hundreds more in the future.
Baitieh commented: In a highly competitive market, we are focusing hard on delivering the best value for customers to give them more reasons to shop at Morrisons. While more recent international news creates some grounds for optimism, we continue to monitor the impact of input inflation very closely and remain committed to doing whatever we can to help keep prices down for customers.
