Rami Baitiéh - Morrisons (1)

Morrisons boss Rami Baitiéh today refused to rule out further job cuts in the coming months, after revealing the retailer was accelerating plans to make hundreds of millions in efficiency savings.

Despite delivering its best store performance for four years as Baitiéh announced its full-year and Q4 results for the year to 27 October today, with like-for-like sales up by nearly 5% in the final quarter, the former Carrefour boss warned of stormy waters ahead. 

Baitiéh laid much of the blame at the door of the government, launching an outspoken attack on moves to increase taxation in the October budget, which he said meant it had no option but to look to make major cost-cutting measures.

He added Morrisons had already saved £600m in cost savings and productivity in the past two years, but said that process was now being expanded.

“Now with the budget pressures we actually need to accelerate this move,” he said.

“We have identified already areas inside the company and in our supply chain process where we have many links. 

“We’ve found that we can have some improvements and improve our efficiency.

“We are looking at the 600m we have saved and looking at how we can go faster and deeper in those cost savings.”

morrisons staff worker

Source: Morrisons

Baitiéh’s announcement of further cost savings comes after The Grocer revealed last week that Morrisons was to axe more than 200 staff from its retail people team. 

Staff affected by the changes are understood to have been involved in roles including customer experience, employee engagement, recruitment and payroll.

Asked if more job cuts were in the pipeline, he said: “Today we don’t have a plan about job cutting, what we are working on today is really to focus on the efficiency of our supply chain process, but we are still working on this topic and we might need other actions in the coming two or three or probably six months. 

“It’s fair to say that some of the additional costs from the budget were unwelcome and unexpected and we are going to have to redouble our effort if we are to manage that. 

“It’s too early to make a call on the direct implications on employment or food prices, but it’s clearly an unhelpful and significant upward pressure on the overall inflationary environment in the country.”

Baitiéh said the impact of the government’s plans on National Insurance alone were set to cost Morrisons more than £85m.

He told The Grocer: “It is a serious matter. It’s unwelcome and unexpected for me and all the other retailers.

“We have shared our concern with the government and asked for adjustments. 

“In the meantime, as a responsible retailer, we have to sit down and say what if all of this is confirmed, what are the internal actions we can do without inflating our prices because we know what the consequences of that would be. 

“Let’s start with the working on our internal process, working on our supply chain processes.

“We will see in the coming weeks if this is sufficient to offset the additional costs and let’s hope the budget will be amended or adjusted somehow for us.”

However, Baitiéh today ruled out Morrisons following Asda, which yesterday announced it was scrapping its Aldi and Lidl price match scheme, as boss Allan Leighton launches a major new fightback strategy. 

Asked if Morrisons might follow suit, Baitiéh said: “Our competitor is our competitor, our strategy is our strategy. 

“This is what has helped us get back our customers. We believe in our strategy. We believe in price match and everyday low price. 

“We have hundreds of items in price match. We are committed to stick to our strategies. Because I listen to our customers and they are happy with what we are doing.”

 

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Baitiéh said he was “extremely proud” of work carried out by Morrisons management and shop floor staff, which has resulted in its resurgent sales figures.

However, he also admitted that availability figures had still not bounced back to the levels before the disastrous Blue Yonder ransomware attack in November, which left the retailer having to build an entirely new warehouse management system from scratch.

“It had a direct impact on our availability,” said Baitiéh. “Our teams were amazing, to build a system from scratch. 

“But those four days had an impact. As we speak today our availability is already better than last year but we are still working very hard to get to the levels that we had last year.

“My first priority is to win back those customers we lost as a result and we’re having to win back so we can give them trust again. 

“We are bouncing back and we are in very good shape.”

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