Morrison reports positive progress, despite flat turnover

UK multiple Morrisons has reported flat turnover in the first half of the year, despite the stabilisation of like-for-like sales in the six months to 31 July.

Total turnover was down slightly compared to last year, down 0.4%to £8.03bn, (stripping out the strong fuel sales took this to -1.3%) but like for like sales rose 1.4% over the first half, buoyed by a 2% boost in the second quarter, marking the third consecutive quarter for of positive growth. Online sales rose 1.1%, it reported, and although the Amazone tie-up was still in the early days, it said the progress had been good. It said there were likely to be “hundreds” more lockers in stores for click and collect by the end of the year and it was developing “further potential opportunities for wholesale supply with other customers.”

Like-for-like transaction numbers also rose, up 4.3%, it noted.

Chief executive David Potts said underlying profit growth was 11% and the retailer noted progress in its six key priorities – being more competitive, serving customers better, developing popular and useful services, simplifying and speeding up the organization and making the supermarket strong again – which had boosted shopping trips and customer shopping trips. It also pointed out its new deal with Amazon and Ocado as an operational highlight, along with the plan to boost its online operation and noted the success of the recent wine festival and new craft beers in building on the BWS reset.

It said it was on track for cost savings of around £1bn by the end of the financial year, and net debt was also set to fall, which helped give “a cash flow profile and strong balance sheet to provide firm foundations” on which to further develop its strategy.

“There is still a lot we plan to do to deliver the six priorities and we still a substantial relative catch-up opportunity,” Potts said.

Total turnover at the retailer was flat, although like for likes were up2% in the second quarter.

Potts said it was too early to see the effect of the Brexit referendum on the economy, but it hadn’t seen any negative impact on behavior or confidence.

“Our properties are unchanged and we will continue to invest in becoming more competitive and improving the shopping experience for customers,” he said.