Slide blamed growing pessimism among buyers amid the rising cost of living and political uncertainty.
Morrisons said sales and profits declined over the past year despite raising prices, prompting shoppers to become “increasingly pessimistic” amid rising costs of living, political uncertainty, and rising costs. He accuses them of being “targeted”.
The retailer, which lost its position in the UK’s fourth largest supermarket to Aldi last year, saw its underlying profit fall by 15% in the financial year that ended 30 October to 828 million. said to have reached the pound.
The drop in sales came despite consumers paying more for each product on average, according to the British Retail Consortium. Morrisons posted a loss of £33m after his one-off costs and interest payments.
The company has incurred a net £219m in one-off charges, including £18m in store closures and £108m in amortization of onerous contracts, mainly related to its acquisition of convenience store chain McColl’s. I paid.
The company’s chief executive, David Potts, said the volume of merchandise sold by Morrisons has declined as prices have risen, adding: “Across the UK, consumers are facing the Covid pandemic, political uncertainty and cost I’m becoming more and more pessimistic as I deal with being put off by the rise in the number of people.
“It’s been a tough time, obviously consumers are making tough choices,” he said.
Morrisons’ sales have been disappointing compared to big rivals such as Tesco, Sainsbury, and Aldi, all of which have posted strong growth over the past year amid rising prices.
Mr. Potts said his £7 billion debt-financed acquisition by his US private equity firm Clayton Dubilier & Rice in 2021 did not deter the retailer. He said last year was a “year of transition” and added:
“It works well with CD&R to make it more effective.”
Accounts filed on Thursday showed the chief executive’s annual salary fell to £1.7m, including pension contributions from £4.3m last year.
Morrisons, which packaged and processed many of its groceries in-house, was hit so hard by higher costs that it could not outsource to suppliers to slow the impact, Potts said. .” “.
“As a vertically integrated retailer, we are feeling the effects of last year’s runaway inflation more directly than our peers, and this is having an impact on our pricing,” he said, adding that if inflation drops sharply, added that the Morrisons would also feel more profit.
Potts said consumer pessimism “has abated” over Christmas and the men’s World Cup, and the Morrisons have beaten expectations over the period.
With sales up 2.5% in the three weeks leading up to Christmas, Potts acknowledged that the company had “gained momentum” in cutting prices since November.
Morrisons said it expects underlying earnings to increase next year as “improving trading momentum and various cost-cutting programs” are “confident that they will more than offset inflationary headwinds”.
Potts said the group is now slashing prices on hundreds of items most interested shoppers have added, adding more options to the cheapest range and giving stores more staff time to improve service. I’m splitting However, he acknowledged that inflation continues to hit businesses through commodity prices and labor costs.
The group says it’s cutting costs by improving automated checkout operations, reducing food waste, streamlining product assortments, and installing headsets to help employees communicate with others. said. Potts said last year’s acquisition of McColl’s was an important part of the group’s future, with plans to convert 400 stores to the Morrisons Daily format this year. Three new Morrisons supermarkets will also open.