In a bold move to compete with discount giants Aldi and Lidl, Morrisons has launched its own version of the famous middle aisle, dubbed the "When It's Gone, It's Gone" range. This strategic initiative aims to attract shoppers seeking bargains and revitalise the supermarket's market position.
A Direct Challenge to German Rivals
Morrisons is emulating the successful model pioneered by Aldi and Lidl, which features rotating bargain aisles with limited-time offers. The new discount section will be refreshed every Wednesday, offering customers a variety of must-have products at reduced prices. However, the supermarket has cautioned that not all items will be available in every store, with updates provided online to reflect products with good availability across its estate.
Leadership's Optimistic Outlook
Chief executive Rami Baitiéh highlighted the area as a standout performer in recent trading, stating, "This marks an encouraging period for Morrisons." He emphasised a relentless drive for improvement, adding, "But we are not satisfied, and we will not be satisfied. This is our mindset." This launch comes amid a challenging financial backdrop for the chain.
Financial Performance and Cost Savings
Morrisons reported annual losses of £381 million for the year to October 26, primarily due to hefty borrowing costs, including a £281 million interest bill on its debt. Despite this, the group narrowed losses from £414 million in the previous year and enjoyed a resurgent sales performance over the Christmas period.
Jo Goff, chief financial officer, detailed efforts to mitigate cost pressures, saying, "We worked hard during the year to offset the significant and unexpected cost headwinds arising from the Government’s 2024 budget and other inflationary pressures." The cost reduction programme delivered savings of £233 million, bringing the total to £845 million, with expectations to exceed a £1 billion savings target by the end of 2025-26.
Debt Reduction and Future Prospects
Owned by US private equity firm Clayton, Dubilier & Rice, Morrisons reduced its debts by 10% over the year, though it still carries a substantial £3.1 billion debt pile. The launch of the discount aisle is seen as a key part of its strategy to improve financial health and customer appeal in a highly competitive grocery market.
