Morrisons has reported a slowdown in sales growth for its most recent quarter, citing a "highly competitive" market environment. The supermarket chain announced that total sales increased by 1.7% to £4 billion over the 13 weeks ending 26 April, a deceleration from the 2.6% growth recorded in the previous quarter.
Like-for-Like Sales Decline
Like-for-like sales growth also eased to 2.2%, down from 2.8% in the preceding three-month period. Despite the slowdown, Chief Executive Rami Baitieh expressed satisfaction with the results, highlighting an "encouraging start" to the third quarter and anticipating a boost from the World Cup and Father's Day.
Market Position and Competition
Morrisons has recently been overtaken by discount rival Lidl, slipping to become the UK's sixth-largest grocery retailer. The chain has seen its market share decline in recent years as competition intensifies. To counter this, Morrisons is focusing on value and executing a turnaround plan aimed at improving sales and profitability.
Turnaround Strategy and Cost Savings
Under Mr Baitieh's leadership, the company reported a 5.7% rise in underlying earnings to £323 million for the first half of its financial year. During the latest quarter, Morrisons achieved an additional £48 million in cost savings, moving closer to its £1 billion savings target. As part of cost-cutting measures, the retailer announced plans last month to close around 100 loss-making convenience stores, citing "Government policy" as a factor compounding cost pressures.
Store Expansion Plans
Despite closures, Morrisons opened 30 new Morrisons Daily franchise stores in the quarter and plans to launch hundreds more in the coming years. Mr Baitieh commented: "In a highly competitive market, we're focusing hard on delivering the best value for customers to give them more reasons to shop at Morrisons." He added: "While more recent international news creates some grounds for optimism, we continue to monitor the impact of input inflation very closely and we remain committed to doing whatever we can to help keep prices down for customers."
