Morrisons reported increased half-yearly profit for the first time in four years and a third straight quarter of underlying sales growth, as its turnaround under a new management team gained momentum.
Chief executive David Potts has closed underperforming stores, continued with rounds of price cuts to keep up with discounters, Aldi and Lidl and partnered with Amazon and Ocado to improve its online delivery offering. The company has also reduced its debt pile by £477 million to £1.27 billion.
The supermarket said like-for-like sales grew 2 per cent in the second quarter, while pre-tax profit for the six months to 31 July rose 13.5 per cent to £143 million.
Chairman Andrew Higginson said: “The new team has made a real difference and delivered further good progress across the board in the first half. Prices are lower, customers are being served better and quality is improving.”
Turnover edged down 0.4 per cent to £8.03 billion in the half year, with like-for-like sales up 1.4 per cent in the period.
On Brexit, the firm said: It is too early to know how the recent referendum result could affect the British economy, but customers tell us their food shopping has not changed. We have seen no negative impact on customer sentiment or customer behaviour.“
However, it did warn that the price of food, which has been kept down by stiff competition may not last, as imports would become more expensive if the pound remains at its current low level.
Mr Potts, who has embarked on a number of measures to reverse years of stagnation at the grocer, said he is planning more improvements.
Morrisons' turnaround in fortunes is in contrast to deem and gloom issued by Waitrose-owner, John Lewis. The retailer warned of "far-reaching changes taking place in society, in retail and in the workplace". Profits for the half-year were down almost 15 per cent.
Fashion chain, Next, echoed the negativity, warning of a "challenging and volatile" market and possible price hikes after it announced a sales dip.
Additional reporting by PA
