Morrisons posts profit rise but coronavirus brings ‘unprecedented challenges’

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Grocer Morrisons has reported a rise in full-year profits but cautioned that the coronavirus pandemic brings “unprecedented challenges”.

Morrisons’ pre-tax profit before exeptionals rose 3% to £408m last year, when total sales edged down 1.1% to £17.5bn. Group like-for-likes were down 0.8%.

The grocer reported that highlights last year included “significant investments” in price, service, and its Market Street food offer which had all improved the shopping trip for customers.

Other initiatives included extension of the online offer through Amazon Prime Now to eight cities and an overseas wholesale deal to supply CP Lotus in China.

Morrisons has responded rapidly to the coronavirus outbreak, expanding its online delivery capability to pick from more than 100 stores and offering immediate payments to small suppliers.

In its current trading update, Morrisons said that the retail contribution to like-for-like performance improved to flat for the first four weeks of the new year, and was ahead 5% in the first six weeks, ”after considerable stocking up and sales pull-forward recently”.

Morrisons chiefs decided not to make a special dividend payment because of the coronavirus outbreak. The retailer said: ”Instead, during the usual process of reviewing capital allocation, we determined it would be prudent to defer the decision given current unprecedented events around COVID-19. This gives us maximum future flexibility around how we prioritise uses of our strong cash flow, and we will keep our capital allocation options under review.”

Morrisons chair Andrew Higginson and chief executive David Potts said: “We are currently facing unprecedented challenges and uncertainty dealing with COVID-19. Looking after our colleagues and customers is our priority, ensuring that we have a clean, safe place to shop and work.

“At Morrisons, we have a strong, experienced, and above all, determined team of the best food makers and shopkeepers in Britain. We promise to work as hard as we can for customers, suppliers, and all stakeholders to keep our shops operating as smoothly as possible. Thank you to all our colleagues for your incredible efforts so far.”