Morrisons saw like-for-like sales increase by 2.1% to £4.0bn during its first-quarter period to 26th January as it made “exceptional” progress with its turnaround plans.
The growth came despite the impact of a cyber attack on its supply chain management partner Blue Yonder at the end of last year, which caused major disruption for the retailer and affected its stock accuracy, availability, waste and forecasting.
Morrisons highlighted that it saw record sales (78%) linked to its revamped More Card loyalty scheme. It also flagged its strengthened senior management team, including Andrew Staniland as Group Trading Director, Food; Matt Heslop as Director of Convenience and Wholesale, and Matt McLellan as Group Data and Media Director.
Meanwhile, the company achieved a further £56m of cost savings in the quarter, taking the total to £668m since the start of the programme. It announced today that it was now raising its savings target from £700m to £1bn in the medium term.
This comes just days after Morrisons revealed that it was making changes to its store operations to mitigate “recent significant cost increases”. This includes closing 52 of its cafés, all 18 Market Kitchens, 17 convenience stores, 13 florists, 35 meat counters, 35 fish counters, and four pharmacies.
On its latest trading results, Chief Executive Rami Baitiéh said: “Despite a challenging environment, Morrisons has made exceptional progress in a very short time, and that is entirely down to the hard work, positivity, talent and customer focus of the colleagues in our stores, in our foodmaking sites and in our operations across the country.”
In recent months, the former Carrefour executive has been an outspoken critic of government taxation and regulation measures impacting the grocery industry. Commenting today on its cost-saving plans, he said: “We are increasing our target to £1bn, which will help us offset cost headwinds, invest for customers and remain competitive in a fast-changing market.”
NAM Implications:
- Significant progress:
- 78% of sales linked to revamped More Card.
- Strengthened senior management team
- A further £56m cost savings in the quarter
- Taking the total to £668m
- Taising its savings target from £700m to £1bn in the medium term
- On top of radical cuts in its estate
- Morrisons are clearly taking their recovery seriously…
- …and it is working.
- Time for a change in your Morrisons strategy maybe?
