Morrisons relies on growth in convenience and online
“Our strategy for growth in convenience and online is now set,” said Philips, Morrisons’ chief executive. The retailer was on schedule to launch its online food proposition in January 2014, he added.
“We've been working at pace on our online offer; the final pillar of our strategy. Morrisons.com will be making home deliveries of our great fresh food by the end of January 2014, supported through our long-term service agreement with Ocado.”
100 ‘M local’ convenience stores
The retailer was also on track to have 100 ‘M local’ convenience stores operating this year – about half of which will be in London and the south east. So far, 33 M local stores were trading and said to be performing well.
A new convenience distribution centre had been secured in Bury to serve outlets in the north of the country.
The firm reported underlying profit down 10% to £401M for the six months to August 4 2013, compared with £445M during the same period of 2012/13.
Profit before tax was £344M, compared with £440M in £440M.
Net debt rose to £2,529M versus £1,680M in the comparable reporting period. Gearing (the proportion of assets financed by long-term borrowing) rose to 48%, up from 32% in 2012/2013.
But total store sales were up by 0.8%, while like-for-like store sales were down by 1.6%
Total turnover, at £8.9bn, was in line with last year.
Early indications of a recovery
Morrisons said that while early indications of a recovery in the UK economy were encouraging, the retailer had yet to see this impact on consumers’ pockets. “We have therefore developed our financial and operational plans on the basis that there will be no significant change to the challenging economic environment in the near future,” said the firm.
It expected sales to improve in the second half and predicted that group performance would be “broadly in line with its previous expectations”.
Sir Ian Gibson, non-executive chairman, underlined the tough market.
“Consumer confidence and market conditions have remained challenging in the first half,” said Gibson.
“We have continued to invest in and develop our customer offer and this has been reflected by an improved sales performance compared with the second half of last year.
“Our financial position is strong and we remain focused on maximising returns from our assets and delivering superior shareholder returns. Once again, our interim dividend is increased by 10%, in line with our previous commitment.”
