Morrisons is “prepared to protect customers” throughout 2026 as food inflation and competition from rivals intensifies, CEO Rami Baitiéh has vowed.
Hailing Morrisons’ “progress” during “a year of renewal” in which it delivered like-for-like sales growth of 2.8% and stabilised its recent market share falls at 8.2%, Baitiéh promised more of the same in a full-year financial results presentation today, as it aims to claw back market share and get shoppers spending more in its stores.
A “very clear” trade strategy based on a four-pronged “value triangle” of better prices, better adapted prices, investment into its More Card loyalty scheme, and better promotions, coupled with improvements in its “up and down” availability and shopper experience had “satisfied” customers, Baitiéh said.
However, Morrisons still had “a lot more to do” to win back shoppers, who continue to feel the pressure of the cost of living crisis.
Food inflation unexpectedly rose of the first time in five months in December, hitting 3.4% driven by increases in transport, alcohol and tobacco prices. Baitiéh predicted further rises over the coming months.
“We are prepared to address customers’ needs over 2026, and the start of quarter one is a good signal that we are on a good track,” Baitiéh said.
Morrisons started 2026 with a wave of price cuts on 2,300 key basket lines, adding to more than 600 in September 2025. However, its rivals have also come out swinging. Asda has vowed to undercut Morrisons’ loyalty prices, Aldi and Lidl continue to build on what were record Christmas performances, and Tesco boss Ken Murphy has set his sights on breaching 30% market share.
While Baitiéh acknowledged “looking at the market very closely”, and that competition was intense, he broadly dismissed fears that 2026 would see the price war speculated throughout much of last year finally spark.
“Honestly the first thing I look at is my customer’s needs,” Baitiéh said. “Our target is about how to make our product available and affordable to everyone.
“We talk about many retailers, some of them are price-focused. Some of them are loyalty-focused. But when you look at Morrisons we are addressing the price, we are addressing the promotions, we are addressing the loyalty, we are addressing the availability.”
Fresh was one area that Morrisons was uniquely placed to win market share, Baitiéh said, following a major modernisation of its “DNA” Market Street proposition under group trading director Andrew Staniland.
“We are developing competitive advantages of Market Street. None of those [rivals] mentioned have Market Street, bakers in the stores, fishmongers or cafés in stores. We have our uniqueness and we see it in our customers,” he added.
It would also continue to grow loyalty – which hit sales participation of 81% and swipe rate of 67% – through more couponing and by improving the level of personalisation. Growth would continue to come through its Morrisons Daily c-store expansion, with the aim of reaching 1,700 by the end of the financial year.
‘Please no more’ government costs
Morrisons’ “robust” performance came despite what were £200m in “unexpected external cost headwinds” in the spring, courtesy of Rachel Reeves’ increases to National Insurance as well as EPR costs.
“We showed resilience, but I would say please no more. This is very important for the market and for customers,” Baitiéh said.
Its supermarkets were also massively hampered by a cyberattack on its key supplier Blue Yonder in Q1, which left screens blank and depots empty.
Morrisons had also made progress on its ‘save to invest’ cost-cutting programme, with debts now down to a still substantial £3.2bn.
CFO Jo Goff ruled out the need for any further job cuts, following several hundred over the past year, thanks to improvements in store operations as well as current attrition rates.
Switching replenishment models from night to daytime had helped Morrisons reduce employment premiums. The rollout of ESLs over the next year would further reduce labour costs from stores, she said.
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