Morrisons to close 11 stores nationwide
Having unceremoniously ditched its former chief executive Dalton Philips, it parachuted in Tesco lifer David Potts to steer the supermarket back into calmer waters. The figures for six months to 2 August showed that reported pre-tax profits fell a worse-than-expected 47.2% to £126m on turnover down 5.1% to £8.1bn.
“Morrisons will be looking to refocus and consolidate more widely to secure the profitability of the group as a whole – particularly on today’s news of falling profits in the first half of the year”.
Morrisons is selling the loss-making convenience business to a team led by retail entrepreneur Mike Greene and backed by investment firm Greybull Capital. “Morrisons learnt much from its entry into the market, but M local was unable to scale”, said Mr Potts. The location of the latest supermarkets earmarked for closure has not been disclosed, though Morrisons said closures will be mainly smaller-sized supermarkets.
The future of Worcestershire’s five Morrisons stores remains unclear as the company stays tight-lipped about which of 11 supermarkets it plans to close in a nationwide cost-cutting programme. “They tell us there is a lot for us to do”, CEO David Plots said in a statement.
The second is to improve customer service following complaints that store staff seem disengaged, which is seen as a reflection of previous management decisions.
Morrisons continues to fight a fierce price war with its big rivals, Tesco, Asda and Sainsbury, who are all being squeezed by discounters Aldi and Lidl.
He added: “This will be a long and challenging journey but an important one for one of Britain’s great retailers”.
Potts said his priority in his first year would be to slow the group’s loss of market share and reduce the magnitude of same-floorspace sales falls. Morrisons “invested” £181m in low prices over the half, eating up nearly all of the £189m in cost savings it made towards its £1bn target.
It is not yet known if any Gwent stores will be affected. The group said: ‘We have seen no change in shopping habits, with customers continuing to shop around for value and shopping more frequently.