Morrisons CEO David Potts

Morrisons sales fell 4.2% year on year for the 52 weeks ending 30 October 2022, with the supermarket blaming high food inflation and continued upheaval from the war in Ukraine.

CEO David Potts described a “continuing sense of uncertainty” but said its recent programme of price cuts was beginning to turn the tide. 

Group revenue for the year was up 2.2% from £18bn last year to £18.4bn, and Potts said sales had been on a “steadily improving trend”.

Sales in the three weeks before Christmas were up 2.5% on last year and on a three-year basis. Group like-for-like sales excluding fuel were up 2.6%, and up 3.4% including fuel.

Morrisons also pointed to adjusted EBITDA of £828m, at the top end of the guidance given at Q3.

It  expected continued cost and other inflationary headwinds, but was confident that improved trading momentum and cost-saving programmes would ”more than offset them”.

However, CEO David Potts described the climate as “very difficult” and the supermarket is under big pressure to increase competitiveness with the discounters and other supermarkets.

This week Morrisons launched another round of price cuts, with 820 products reduced including meat, fruit & veg and confectionery lines.

It has also cut the price of a raft of household products such as kitchen roll, with the cuts overall averaging 20%.

Morrisons said the cuts would be locked for at least two months.

“In a very difficult period for consumers and businesses alike, we are continuing to do everything we can to keep prices down for customers and to support our colleagues,” said Potts.

“As a vertically integrated retailer, we felt the impacts of last year’s racing inflation more immediately than our competitors and this did have an impact on our pricing position.

“However, since October we have executed a rolling programme of meaningful price cuts, price freezes and fuel promotions for our customers and our competitive position has considerably sharpened.

“I’m particularly pleased with the impact of the changes to our entry-level range in early January with over 130 Savers prices cut and the range increased, which has been really popular with our customers.”