Morrisons posted a steep rise in profits, but its like-for-like sales growth slowed to 2.7 per cent for the 25 weeks to July 29.
The UK’s fourth largest supermarket delivered a 57 per cent lift in operating profit (before property gains and tax) to£247 million, compared with£158 million for the same 25-week period last year.
Total sales rose 2.8 per cent on the period, on like-for-likes (excluding fuel) up 2.7 per cent in the period. However, in the subsequent seven-week trading period, Morrisons like-for-like sales improved to 3 per cent growth – but this is understood to be lower than that of its major rivals, Tesco, Sainsbury’s and Asda.
Panmure Gordon analyst Philip Dorgan said: “Management acknowledge the need to increase sales momentum in the second-half, but we don’t see a catalyst. Long-term recovery stories are built on top-line growth and, once again, we fail to see where the catalyst is.”
Dorgan added that some shareholders will be disappointed by Morrisons decision to postpone its joint property venture, because it puts on hold the return of between£1 billion and£2 billion to shareholders.
On its optimisation plan, Morrisons said it had reduced distribution costs per case by 11 per cent. Morrisons said it was testing self-scan checkouts in selected stores and that it had opened a new grocery warehouse in Swindon in the latter part of the 25-week period that will significantly reduce journey times and costs to the Southwest.
No comments yet