Morrisons share price forecast: Supermarket warns of long recovery as profit slumps
Morrisons chief executive David Potts warned yesterday that it will take “years not months” to turn the ailing chain around as first-half profit plunged by a third to its lowest level in nine years.
Unveiling his plan for the business, the former Tesco director who took over in March said his main focus was on improving Morrisons’ core supermarket estate of 500 stores, which has been hurt by rising competition from the discounters in its Northern heartland.
But this will include axing a further 11 loss-making stores on top of the 10 already closed this year, putting 900 jobs at risk.
The UK’s fourth largest grocer made a late entry into the online and convenience market two years ago and decided to offload its M Local this week after buying poorly located sites.
However, Potts (pictured) said that its tie-up with Ocado had made a promising start and hinted that there may be further expansion plans in the pipeline, pointing to Scotland as one potential growth area.
“I see the Ocado contract as part of a broader national opportunity… We are the smallest retailer of the big four but online gives us broader reach,” he said.
Underlying pre-tax profits tumbled by 35 per cent to £117m in the first half to 2 August while turnover dropped 5.1 per cent to £8.1bn. Like-for-likes excluding fuel dipped 2.7 per cent.