David Potts, Chief Executive, said:
“We stayed focussed on our Fix, Rebuild and Grow strategy, and were pleased to maintain the momentum of the turnaround against strong comparatives last year. Sales and profit progress was robust, and we again invested in improving our competitiveness for customers”.
In the second half, Morrisons are expecting retail like for like sales to improve. Slower than expected growth in the first half was largely due to the unfavourable summer weather and lack of large events such as the World Cup and Royal Wedding.
David Potts continued to say ‘Customer behaviour also continues to be impacted by the uncertainties around the prolonged Brexit process’.
Strategy Update
In order to progress their Fix, Rebuild and Grow strategy, Morrisons announced several wholesale supply initiatives.
Firstly, Morrisons and Amazon have announced a further extension of the relationship with a mutli-year partnership. The same day online grocery home delivery service is currently available to Amazon Prime Now customers who order on Morrisons and have the food delivered by Amazon, with the option for delivery within one hour for many customers. The service is currently available in Leeds, Manchester, Birmingham and London. Over the second half of 2019, Morrisons will begin to roll out the initiative into other cities including Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth.
In addition, Morrisons have announced a new wholesale partnership with Harvest Energy. Along with the current partnership with Rontec and McColl’s conversion will continue into Morrison Daily stores.
Update on the Morrisons 6 priorities:
- To be more competitive
Morrisons continue to add British great value items under their brands such as Woodhead Bros, their fresh meat business. They won the BBC Good Food Summer Taste Awards with their Best British beef burgers.
- To serve customers better
Morrisons were awarded the Environmental Sustainability Award for their work on plastic reduction, they were the first UK supermarket to launch a reusable paper carrier bag in all stores. In addition, 60 loose fruit and veg areas will be in Morrisons stores by the end of 2019.
- Find local solutions
Many local food makers are continuing to have success with Morrisons by expanding to a wider region, helped by the eight local food maker events that occurred across the country. Since 2017, 775 products are now in store supplied by 165 suppliers from the events.
- Develop popular and useful services
The extension of the partnership with Amazon means that more customers will be able to receive one day home grocery delivery.
- To simplify and speed up the organisation
Morrisons introduced enhanced in-store systems to reduce waste and markdown and enable better visibility and availability as well as looking at range optimisation. Work continues in the supply chain to introduce forecasting tools to enable better order planning for short and long term as well as promotions.
- To make core supermarkets strong again
Around 20 Fresh Look refits were completed in the first half, with around 45 in total planned and two new stores for the year. A new programme has also been launched to increase investment for the Market Street fresh food counters to drive learning and innovation.
Corporate responsibility and community
Morrisons have invested £2m of their government apprenticeship levy in developing the next generation of farmers. The funding will seek to equip aspiring future farmers with the skills and business knowledge needed to succeed in the industry. Read more here.
Morrisons were the first retailer to commit their entire milk supply to Arla Food’s new farming standards programme which covers six key areas including animal health and people. 200 Arla farmer owners will be directly supported by Morrisons.