Morrisons has warned of a “very fragile and difficult consumer environment” as it reported a drop in sales over the past three months.
The supermarket group said sales on a like-for-like basis, excluding fuel and VAT, fell 6.4% in the 13 weeks to May 1, which it blamed on inflation and “increasingly subdued consumer confidence”.
The company’s total revenue rose 2.6% from the same quarter last year to £4.6 billion, helped by a 54% increase in fuel sales amid rising prices.
Underlying profit rose by £9m to £71m in the quarter on the back of cost savings and an earnings recovery in areas previously impacted by COVID-19.
Chief Executive David Potts said: “In what has been a very fragile and difficult consumer environment, Morrisons has continued to deliver a robust performance.
“This quarter traded over a period of significant COVID restrictions last year when both travel and hospitality were severely restricted.
“As both of these activities returned to more normal patterns this year, we saw very strong growth in fuel sales but regression in grocery sales.
“In April, we launched one of our largest price reduction campaigns to date, covering over 25% of our entry-level products.
“But these are serious times and there is more serious work ahead as we help clients and colleagues navigate the highest inflation in 40 years.”
Earlier this month, Kantar Worldpanel released figures proving this Comparable food prices up 8.3% annually in the four weeks ended June 12, up 1.3% from the previous period.
Kantar warned that the price jump among the broader Cost of Living Crisismeant households were faced with the prospect of paying £380 more a year for their groceries as supermarkets and their supply chains faced rising costs for things like energy and fuel.
Morrisons saw it £7bn takeover by private equity firm Clayton, Dubilier & Rice cleared by regulators earlier this month.
Last month, Morrisons struck a deal to bail out convenience chain McColl’s McColl’s employees keep their jobs and the supermarket group, which is taking over the company’s two pension plans.
Morrisons sees sales down amid ‘very fragile and difficult consumer environment’ | business news
Source link Morrisons sees sales down amid ‘very fragile and difficult consumer environment’ | business news