Transformation of “a new Morrisons” delivering results

“A new Morrisons is beginning to take shape” according to its chief executive David Potts, as he unveiled more progress in the supermarket’s turnaround.

Potts took over the Bradford-based group in March 2015 when it was in crisis, as the discount supermarkets ate into its market share. Despite scepticism from analysts and investors about whether a turnaround was possible, successive updates on the sales and financial performance of Morrisons has put it in a position of strength.

Morrisons chairman Andrew Higginson, whose first act as chairman in January 2015 was to sack the then-chief executive Dalton Phillips, said: “Our seventh consecutive quarter of positive like for like means that we are able to report profit growth on growth for the first time in the turnaround.”

The company’s interim results to July 2017 show underlying profit before tax was up 12.7% to £177m (2016/17: £157m), with margin broadly flat year on year at 2.5%. Turnover was up 4.8% to £8.42bn (2016/17: £8.03bn).
Sales were up 5% to £8.42bn, while net debt fell by £262m and is now below its target of £1bn.

David Potts, chief executive, said: “A new Morrisons is beginning to take shape. The capability of the team continues to improve and we are making strong headway with our plans to Fix, Rebuild and Grow. Our supermarkets continue their focus on improving the customer shopping trip and, in wholesale supply, we are beginning to realise some of the opportunities that our unique team of food makers and shopkeepers bring us.”

Its “Fix, Rebuild and Grow” strategy as part of its turnaround programme and recently announced a supply agreement with McColl’s in order to drive its wholesale business forward. This is expected to see total annualised wholesale sales across all partners exceed £700m, including tobacco, by the end of 2018.