Morrisons is still cratering and 900 staff are facing the axe
The retailer put out its half-year report on Thursday and pretty much every key number is down. Here's the damage:
- Sales at stores open for a year or more down 2.7%;
- Total turnover down 5.1% to £8.1 billion ($12.4 billion);
- Pre-tax profit down 47% to £126 million ($193.4 million).
The numbers follow the worst full-year figures for 8 years from Morrisons in March, when profits tanked 52%. Today's figures show sales are falling at a slower rate, but that's about the only positive you can pick out.
Britain's fourth largest supermarket is in the midst of a £1 billion ($1.5 billion) cost saving programme as it battles to reverse its decline and Morrisons announced today that it is closing 11 supermarkets across the country.
CEO David Potts told BBC Radio 4's Today programme that as a result 900 jobs are at risk.
He said: "It is with regret today that in the context of rebuilding Morrisons we've taken the decision to enter consultation to close 11 supermarkets. There are up to 900 staff involved in that decision. We will hope to reemploy them in either nearby stores or manufacturing."
Morrisons has already taken the decision to axe 700 staff at its headquarters, a figure that was revised up to 720 in today's resport.
Morrisons focuses on fresh produce, with half of its goods freshly sourced. But the supermarket has been struggling to adapt to changing trends in the market for years.
The retailer came late to both online grocery shopping and convenience stores. The supermarket announced yesterday that it was exiting its loss-making "M Local" convenience store business after 4 years at a loss of £30 million ($46 million).
Morrisons' woes have been compounded in the last year or so by the rise of aggressive discounters like Aldi and Lidl in Britain, which have driven a supermarket price war in which Morrisons has struggled to compete.
Potts also warned that there were more troubles ahead for the retailer, telling BBC Radio 4 that the new National Living Wage being introduced by the government would increase staffing costs by "tens of millions, not single millions."