If Tesco can take any consolation from its nightmare few months, it only has to look at rival Morrisons to realise it’s not in its struggle against the might of the discounters alone.
In its third quarter results statement, Morrisons shortened its underlying profit before tax expectations after it recorded a drop in sales across the board.
Total sales were down 5.6 per cent for the 13 weeks to 2 November 2014, while like-for-likes fell 6.3 per cent.
But shares in the retailer rose 5.5 per cent in early trading as the supermarket said it is still on course for its full year profit expectations, although it lowered the range from £335m to £365m from £325 to £375m. In its half-year results posted in September, Morrisons pre-tax profits fell by almost a third.
In January Ocado took operational control of Morrisons.com, yet today Morrisons said online accounted for just 0.7 per cent of all sales.
The supermarket has installed a three-year plan in order to get itself “back on the front foot”. Yet despite spending a plan to cut £1bn on prices of 1,200 of its products, it revealed today it has also spent £65m on new business developments.
Chief executive Dalton Philips said in a statement:
Morrisons is meeting the challenges created by a period of intense industry competition and structural change with quick and decisive action. I am encouraged by the further progress we have made, especially on a number of key operational measures, cash flow and costs.