Morrisons chief executive Dalton Philips said he was encouraged by the retailer’s strategic progress despite recording a 6.3% fall in like-for-like sales in the third quarter.
Philips said Morrisons continued to make progress on its three year plan with total sales (ex fuel) down 3.6% for the 13 weeks to 2 November.
He said that it will take time for the initiatives, such as its rebalancing of prices, reducing promotional participation and its Match & More price-matching/loyalty scheme, to positively impact on sales.
However he pointed out that the number items per basket was down 2.4% compared to a low of -6.9% in Q4 of 2013/14. The retailer also claimed that other operational KPIs also showed further improvement.
“Morrisons is meeting the challenges created by a period of intense industry competition and structural change with quick and decisive action. I am encouraged by the further progress we have made, especially on a number of key operational measures, cash flow and costs,” said Philips.
“The launch of the Match & More card was another big move for Morrisons. We are the only supermarket that is price matching the discounters and the successful launch last month was a testament to the positive way our 120,000 colleagues are delivering innovation and embracing the changes at Morrisons.
We look forward to the key Christmas period focussed on offering customers the best in quality fresh food and value for money that Morrisons is famous for.”
The retailer said it was actively progressing plans for greater capital discipline across the business. In September Morrisons announced a proposal to close its produce packing facility in the Netherlands (Bos Brothers BV), and plans to transfer operations either to growers or its existing UK produce facilities during 2015. During the period, it also exchanged contracts to re-assign eight of the ten former Kiddicare leasehold sites, and expects completion in the coming weeks.
Morrisons opened 12 new M local stores and three new core stores, plus one replacement. It said are on schedule to meet its revised target of 60-70 new M local stores by the year end. It also opened a new online hub in Greater Manchester, and said it will be operational in Merseyside soon.
The retailer advised that it now expects underlying profit before tax to be in the narrower range £335m-£365m (previously £325m-£375m), after £65m of new business development costs and £70m of one-off costs.