Morrisons steps up battle with fresh price cuts

 
Kasmira Jefford
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MORRISONS has launched a fresh assault in the supermarket price war after unveiling price cuts on 1,200 products as part of its £1bn programme aimed at winning back customers defecting to cheaper rivals.

Britain’s fourth largest supermarket said that from today it will slash the price of branded products such as Jammie Dodgers and Morrisons produce including sausages and bacon, bringing down prices of 1,200 items by an average of 17 per cent.

It comes after the firm warned that underlying profit would halve this year as it ploughs money into a three-year £1bn plan to narrow the price gap with discounters.

Chief executive Dalton Philips said cuts made since the announcement in February had already helped drive volumes of those lines by 15 to 20 per cent. However, the move will hit Morrisons’ already falling like-for-like sales, with Philips warning that sales are “unlikely to improve anytime soon”.

Philips has been under intense pressure to respond to the threat from discounters and to grow its online and convenience businesses after lagging behind its rivals.

This weekend one of Morrisons’ former longstanding directors Roger Owen compared the group to a “a supertanker heading towards an iceberg” and called for Philips to resign.

However, Philips said he had met with “over 100 investors”, many of whom had shown “strong understanding and support”.