Written by: Keith Tully
Published: 12th March 2015
The supermarket chain Morrisons has posted its worst set of financial results in eight years and seen its profits for the full year to February 1st more than halved as compared with the previous 12 months.
Despite still generating £345 million in profits, Morrisons has been battling to turn around falling sales across its business and to compete more effectively with new and established rivals in the supermarket sector.
With a new chief executive set to take his post on March 16th, the business is planning to slow the rollout of new ‘M’ convenience stores after having opened 57 such locations across the UK in the past year.
In fact, statements from the company have indicated that the new store rollout process will be “slowed significantly” and that 23 ‘M’ local stores will be closed over the course of the current financial year, with 380 jobs to be lost as a result.
Speaking to the BBC, Morrisons’ chairman Andrew Higginson said: “It doesn’t make any sense at the moment to press on with something that isn't working as well as we hoped.”
“Candidly, we got off to a slower start than we hoped,” he said, in reference to the relative lack of revenues being generated through the new M stores in recent quarters.
“Last year’s trading environment was tough, and we don’t expect any change this year,” Higginson said in his official statements issued alongside the company’s full-year financial report.
“David Potts joins as Chief Executive next week. Under his leadership, we will focus on building trading momentum and being more like the Morrisons our customers expect,” he added.
Morrisons bosses have also said that they will look to cut prices in order to attract customers to their stores around the UK and turnaround falling same-store sales, which dropped by 5.9 per cent overall last year.
The promise of price cuts from a major supermarket might though come as more bad news for companies within the grocery retailing supply chain, many of whom have been forced out of business over the past year due to increased pressure on their profit margins and cash flows.