23rd Jun 2014 11:18
LONDON (Alliance News) - Wm Morrison Supermarkets PLC Monday announced another round of price cuts as it attempts to stem a decline in sales and loss of market share to its rivals and German discounters Aldi and Lidl.
The UK's fourth largest supermarket retailer cut prices Monday on another 135 "everyday products," on both brands and own-branded goods.
"This is another major price reduction programme. We are making a real difference to the cost of the weekly family shop by reducing prices on products that our customers use regularly. These are permanent price cuts, not promotions, and they won?t be the last," said Chief Executive Dalton Philips in a statement.
Morrison said the latest round of cuts will see prices slashed by as much as 41%, with an average reduction of 14%. It said the cuts will be across a mix of everyday products, predominantly in the grocery and household areas of the store.
The UK grocery sector has been dominated by four big players in recent decades. However, since the financial crisis, shopper habits have been changing and those players - Tesco, Sainsbury's, Asda and Morrisons - have been losing market share to the likes of Aldi and Lidl at the bottom end of the market, and Waitrose and Marks & Spencer Group PLC at the premium end.
Morrisons continues to underperform its bigger rivals Tesco PLC, J Sainsbury PLC and Wal-Mart Inc-owned Asda, and has been struggling to keep pace, as at the same time it is also having to invest heavily in trying to catch up in the fast-growing online and convenience store sectors.
The wave of price cuts at Morrisons are in response to widening losses, falling sales and declining market share, despite its efforts to invest huge amounts of money in price cuts to lure back customers.
Morrisons launched its "I?m Cheaper" price cuts on May 1, reducing the cost of 1,200 products across its stores, by an average of 17%, as it started to invest the GBP300 million it has said it will spend on various "customer propositions" this year.
The supermarket also recently outlined plans to slim down its management structure, planning to cut around 2,600 management jobs.
Last week, Morrisons said its plans to cut the management jobs will modernise the way its stores are managed, with the aim of reducing in-store management tiers, simplifying responsibilities and improving customer service. It said some of its stores currently have seven tiers between the shop floor and the store manager.
It said the simplified management structure comes as the next step of its modernisation programme to turnaround the business.
Morrisons shares were trading at 188.68 pence Monday midday, down only 0.01%.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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