Morrisons shops for growth as turnaround bears fruit with sales up 1.7%
Grocer Morrisons has well and truly turned it around, reporting positive growth throughout 2016.
The Bradford-based supermarket reported that sales excluding fuel were up 1.7% for the year to 29 January 2016, and 2.5% in the last quarter.
Turnover up 1.2% to £16.3bn from £16.1bn despite store closures which had impacted its bottom line following the disposal of the My Local Chain.
Reported pre-tax profits were up 49.8% to £325m from £217m the year before.
It achieved £1bn in cost savings and promised further productivity and cost savings to come.
Analysts at Kantar Worldpanel earlier this week found that in the last 12 weeks, Morrisons had grown its fastest in five years.
Morrisons chairman Andrew Higginson said: “Food retail is a simple business, but it is not easy. Only consistent and outstanding execution differentiates. I am delighted that the whole Morrisons team are making a real difference.
“I am confident that strong execution will drive sustained dividend growth and improving returns for Morrisons shareholders.”
David Potts, chief executive, said: “Our full year of like-for-like sales and profit growth was powered by listening to customers, and shows what our hard-working team of food makers and shopkeepers can do.
“But, it’s only one year. Our turnaround has just started, and we have more plans and important work ahead. If we keep improving the customer shopping trip, I am confident that Morrisons will continue to grow.”
Retail Remedy senior consultant Paul Thomas said: “The 13.5% uplift in reported pre-tax profit for Morrisons at half-year was just a teaser. Potts will be justly proud of the turnaround few thought possible 24 months ago.
“Future growth looks certain following deals with Ocado and Amazon as Morrisons looks for revenue streams outside of it’s supermarkets and without the major capital investment into new stores and formats.
“That said, achieved cost savings now reported over £1bn, Morrisons have money to reinvest in store refits, the customer journey, range devekopment, supply chain efficiencies, online and wholesale. No mean feat.
“The challenge from Tesco and the discounters will not let up, but while the leadership team continue to drive the supermarket forward and embed a can-do culture in the business, it is becoming increasingly resilient to attack and deflecting the pressure onto a weaker Asda.
“With a strong set of results like this, we could expect an air of arrogance, but instead we have an air of confidence. Yes there is work to do and yes the sands can shift again, but Morrisons are firmly focussed on the customer and with that comes results.”
