Morrisons CEO Rami Baitiéh has announced plans for a further £300m of savings following the closure of numerous cafés, counters and convenience stores announced by the supermarket earlier this week.
The supermarket today revealed group like-for-like sales were up 2.4 % to £4bn in the first quarter, covering the 13-week period ending 26 January.
Baitiéh hailed what he called “exceptional” progress made by the supermarket in its turnaround plans, with the growth in sales coming despite the impact of the cyberattack on Blue Yonder, which caused huge disruption for the retailer last November.
Morrisons also reported record sales linked to its More Card loyalty programme, which it said were linked to 78% of sales, following its move to award loyalty points on every product.
Baitiéh flagged a much strengthened senior management team, including the arrival of former Iceland group buying director Andrew Staniland as group trading director for food, Matt Heslop as director of convenience & wholesale, and Matt McLellan as group data & media director.
However, this week attention on Morrisons has focused on swingeing cuts to its convenience stores, cafés and counters, including its prized Market Street proposition.
On Monday, the retailer revealed it was to close almost 100 fresh counters, more than 50 cafés and 17 convenience stores as part of a major cost-cutting programme that could see nearly 400 jobs go.
Baitiéh defended the cuts to Market Street proposition – which he has previously insisted provides a key point of difference for the supermarket – calling them “simply uneconomic”.
Morrisons also said today it had made a further £56m of cost savings in quarter one, taking the total to £668m since the start of the turnaround programme. It said the target was being raised from £700m to £1bn in the medium term.
Baitiéh has been an outspoken critic of government taxation and regulation measures, which he has blamed for making the economic climate much more difficult than it would otherwise have been for retailers.
He said: “Despite a challenging environment, Morrisons has made exceptional progress in a very short time and that is entirely down to the hard work, positivity, talent and customer focus of the colleagues in our stores, in our food-making sites and in our operations across the country.
“As I outlined in January, the cyberattack on Blue Yonder caused a far-reaching period of disruption across the businesses, affecting our stock accuracy, availability, waste and forecasting. Despite this I am very pleased that we are reporting an increase in like-for-like sales in the quarter of 2.1%.
“In the quarter we delivered a further £56m of cost savings and we expect to deliver the remainder of our £700m target ahead of schedule in the second quarter. We are today increasing our target to £1bn, which will help us offset cost headwinds, invest for customers and remain competitive in a fast-changing market.”
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