Morrisons suffers another sales dip
The new boss of Morrisons said the business was listening hard to customers after the chain reported another drop in sales today.
The 2.9% decline in like-for-like revenues for the 13 weeks to May 3 comes on top of a 7.1% fall posted by the supermarket business a year earlier.
David Potts, who has more than 40 years retailing experience at Tesco, took over as Morrisons chief executive in March after a year in which the Bradford-based chain slumped to a loss of £792 million.
He said: "My initial impressions from my first seven weeks are of 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.
"This is a business with many attributes, some unique. Our task is to use those advantages to improve the shopping trip for customers and create value."
Mr Potts is carrying out a review of the business which will report back at the time of the group's interim results in September.
He has already announced plans to axe up to 720 jobs from the Bradford head office as part of a drive to beef up staff on shop floors.
Shares tumbled 7% in the wake of the update, which showed a deterioration in the rate of like-for-like sales decline against the previous quarter.
Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, described the challenge facing Mr Potts as significant.
He added: "A detailed strategic update is not expected until September, in which time rival Tesco will be hoping for evidence of early recovery following its new and now implemented strategic plan.
"On the upside, online sales growth is providing some compensation for falling supermarket sales, whilst management action including simplifying its head office is now being taken."
Morrisons said it closed more stores than it opened during the period, leading to a reduction in selling space of more than 50,000 square feet.
Restructuring efforts, including the head office job losses, will result in one-off costs of between £30 million and £40 million in the current financial year.
It added that net debt fell by around £150 million to £2.2 billion.
Yesterday, Sainsbury's reported a £72 million bottom-line loss, a fortnight after rival Tesco racked up a deficit of £6.4 billion. Both chains were driven into the red by the lower value of their store estates.