8th May 2014 07:13
LONDON (Alliance News) - Wm Morrison Supermarkets PLC said Thursday that it retains its profit guidance for the full-year and remains on schedule to cut costs and increase its number of UK convenience stores, while reporting a decline in total sales for the 13 weeks to May 4, 2014.
Total sales for the period fell 4.2%, excluding fuel, and by 5.6% including fuel. Like-for-like sales also fell, declining 7.1% excluding fuel, and 8.2% including fuel.
In an interim management statement the supermarket said that its previously announced savings strategy has continued since the announcement of the directive in March; Morrison plans to realise savings of GBP1 billion over the coming three years to strengthen its business and reinforce its core customer proposition. Since then the company said it has been making significant improvements to the layout of its stores and on May 1 cut prices permanently on over 1,200 products.
As the price war between supermarket giants continues, Morrison said it is making good progress in achieving its strategic goals, with its investment in IT infrastructure and systems on track to support its improvements.
During the period, two new core stores were opened, as well as 11 M local convenience stores. The firm said it remains on schedule to meet its target of having up to 200 convenience stores open by the end of the year.
The online unit is also performing ahead of expectations, said Morrison, based on the metrics of delivery times and replacement items. Following the Warwickshire and Yorkshire launches, the supermarket will make its first London deliveries May 12. The company is targeting its online business to reach up to 50% of UK households and, together with the convenience stores, is expected to account for over GBP500 million of annualised sales.
Looking ahead, the supermarket said that, while the trading environment remains challenging, it retains its full-year outlook expectations for underlying pretax profit to come in between GBP325 and GBP375 million.
"The plans we set out at our results in March are on track. The reaction of our customers to the 1,200 "I'm Cheaper" price cuts we announced last week has been very positive. Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers," said Dalton Philips, Chief Executive.
Shares in Morrison dropped shortly after the open, trading 2.04% lower at 186.9 pence per share, the second biggest faller on the FTSE 100.
By Alice Attwood; [email protected]; @AliceAtAlliance
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