Morrisons returns ‘satisfactory’ results
Morrisons said that it has made a “satisfactory” start to the financial year, and has continued to keep its prices low for customers, despite high commodity prices.
In an interim management statement for the 13 weeks to 29 April, the supermarket said that the economic environment for the consumer has remained challenging, with the high price of oil and other commodity prices putting pressure on disposable incomes.
Q1 total sales (excluding fuel) were up by 1.5% and like-for-like sales were down 1.0%.
The supermarket said it continued to focus on the delivery of its strategic and operating initiatives, which includes future investments in meat and fish. Its plan is to invest £200m over a three-year period to support the growth of the business. In March, it unveiled a £21m investment to increase capacity at its Colne abattoir in Lancashire, as well as announcing a deal with Cranswick, whereby Morrisons would buy Cranswick’s 49% interest in fresh meat plant Farmers Boy Deeside. The supermarket also acquired the Vion Winsford meat packing facility in February.
Morrisons also plans to expand its M local convenience store network, and accelerate the roll-out of its Fresh Formats, as well as launching a morrisons.com later in the year.
It said that the strategy, combined with a close management of its cost base, gave the company confidence of achieving continued profitable growth.
The statement said: “We are well advanced on our programme to retire £1bn of equity over the two years to March 2013. To date, we have acquired and cancelled 168m shares at a total investment of £491m. The financial position of the group remains strong.
“The uncertain economic background is expected to remain challenging for the consumer and, accordingly, the board remains cautious. Our performance in the first quarter was broadly in line with our expectations and our financial outlook for the year remains unchanged.”
The latest grocery share figures from Kantar Worldpanel, published for the 12 weeks ending 15 April 2012, showed that Morrisons was lagging behind the market. Its market share dropped by 0.2% compared to last year.
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