Morrisons reports another fall in sales

The supermarket saw a 2.9 per cent drop in the first quarter.

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By :  ,  Financial Analyst

​On Wednesday (May 6th), Sainsbury's first-quarter financial results showed the supermarket's first loss in over a decade – and now another member of the "big four" supermarket chains has also reported a drop in sales.

The first-quarter results for Morrisons show a 2.9 per cent drop compared to the same period last year. In 2014, the first-quarter saw a 7.1 per cent fall from the year before.

Experts point to a change in shopping habits to explain why the major grocers are suffering. Consumers are doing more little shops during the week – rather than a single big weekly shop. The continued growth of discount supermarkets like Aldi and Lidl are also playing a part.

Morrisons said underlying profits before tax would be higher in the second half than in the first half of the year. The company's finance director Trevor Strain said that the company was happy with full-year forecasts of £356 million. Last year, the company's more than halved to £345, making it the worst in eight years. That included a £1.3 billion write-down of the value of its supermarkets and there was a reported statutory loss of £792 million.

It has been less than two months since Morrisons brought in new chief executive David Potts. Mr Potts worked a Tesco for more than 40 years before taking over in mid-March. During his time in charge, he has visited 90 stores and vowed  to improve product availability, customer service and cleanliness.

He said his initial impressions from his first seven weeks are that Morrisons is a business eager to listen to customers and improve.

"I have been very pleased by the desire and support of colleagues, and by the genuine warmth and affection for Morrisons shared by both colleagues and customers," he said.

Mr Potts has announced plans to hire 5,000 shop staff and cutting up to 720 jobs from the head office. He explained that the company runs about 500 stores and serves 11 million customers a week. He said he believes its a good brand and added: "As the British underdog we should rejoice in that position and bring it to life at the shop."

At the close of the stock market in London yesterday (May 7th), Morrisons was down 1.55 per cent to 176.90.

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