Morrisons looks to save £1bn as sales rise ahead of stores shake-up
Morrisons has announced an uptick in sales amid a wide-ranging store shake-up plan which will see hundreds of jobs losses.
Group like-for-like sales rose 2.1 per cent in the 13 weeks ended 26 January while total sales increased by 2.4 per cent to £4bn over the same period.
The Yorkshire-headquartered grocer said it had made £56m of cost savings in the first quarter, taking the total to £668m since the start of the programme. It has raised its cost-saving target from from £700m to £1bn.
CEO Rami Baitiéh said the higher target “will help us offset cost headwinds, invest for customers and remain competitive in a fast changing market”.
Earlier this week, Morrisons announced the closure of 52 of its cafes and 17 of its convenience stores, putting 365 jobs at risk.
The closures are a part of moves designed to “optimise operations” by reducing its huge debt pile, as well as improving sales and market share.
The turnaround has been spearheaded by Baitiéh, who joined as CEO in November 2023.
Morrisons has now repaid around 40 per cent – £2.4bn – of the debt it acquired from its 2021 debt-fuelled takeover by private equity giant CD&R.
“Despite a challenging environment, Morrisons has made exceptional progress in a very short time and that is entirely down to the hard work, positivity, talent and customer focus of the colleagues in our stores, in our food making sites and in our operations across the country,” Baitiéh added.
Part of its turnaround has been a renewed focus on customer loyalty progammes via its More card.
Linked sales grew from 47 per cent in summer 2023 to 78 per cent in March this year.
The grocer has recently made changes to its management team, too, with a number of new senior hires including Andrew Staniland as trading director, Matt Heslop as convenience director and Matt McLellan as media director.