Morrisons’ recovery on ‘shaky ground’ if figures fail to improve

MORRISON’S turnaround strategy could end up on “shaky ground” if its financial performance fails to improve in the next six months.

The Bradford-headquartered supermarket chain will be a third of the way through its three-year plan in six months time, by which time there will have to be a “material boost” to the numbers, according to a retail expert.

Morrisons’ sales continued to slide and underlying profits took a tumble in the first half of the year despite its chief executive Dalton Philips saying he was “encouraged” by the progress made albeit “early days.”

However, Phil Dorrell, director of retail consultants Retail Remedy, says the brutal reality of the numbers contrast starkly with the upbeat language of yesterday’s report.

“For a retailer that has lagged dangerously far behind the technology curve, the idea that it will become a flag bearer of the next generation of grocery retail will ring hollow,” he says.

Mr Dorrell believes a strategy that revolves around price cutting is a “dangerous” one.

“It certainly betrays a lack of imagination, a reversion to retail type. ‘I’m cheaper’ screams out ‘I’m desperate’. And the discounters Aldi and Lidl, who own this terrain, are closing in,” he said.

“Dalton Philips will be excused this latest set of numbers but if something drastic doesn’t happen between now and early next year, the curtain could well fall.”

Morrisons’ stock opened more than 4% higher yesterday morning after the release of its interim results but later eased to 178.40p before closing at 177.80p.