Morrisons sees more sliding profits

MorrisonsMorrisons has slumped to another six months of sliding profits and sales as it said its customers have yet to benefit from the gradually improving economy.

The UK's fourth-biggest grocer delivered a worse-than-expected 1.6% decline in underlying sales in the six months to the start of August, while pre-tax profits dived 22% to £344 million.
%VIRTUAL-SkimlinksPromo%It said customers' incomes are shrinking under relentless pressure from stubbornly high inflation, as the recovery proves "slow and fragile".

Customers are increasingly shopping about for bargains, it added, with more than 40% visiting multiple supermarkets on one shopping trip, and they are buying less food as they stick rigidly to budgets.

But the chain reported more progress with expanding its network of convenience stores. It is trading from 33 and expects to have 100 by the end of its year.

Chief executive Dalton Philips said like-for-like sales are steadily improving after falling 1.8% in the three months to May 5, adding he expects another sales improvement in the second half as its turnaround bears fruit.

Morrisons said it is on track to start selling food online - through a tie-up with internet grocer Ocado - by the end of January.

It said 169 stores have been overhauled with its Fresh Format, which emphasises the quality of its food and shows off its butchers, bakers and fishmonger.

The chain said: "Whilst there are early signs that the UK economy has started to turn a corner, the grocery market continues to be a very challenging environment in which to operate.

"Consumers are continuing to react to these pressures by becoming more discerning, and seeking to get better value for money by both shopping across multiple channels and using innovative approaches to the way they shop."

Morrisons also joined rivals in signalling an end to rapid expansion of new space. It will slash its space growth to around half the rate over the past five years, at 350,000 square feet annually.

In future it expects sales growth mainly to be driven by online and convenience, both of which use less capital than opening big new stores.

Turnover was level at £8.9 billion, but net debt surged to £2.5 billion from £1.7 billion a year earlier as it invested heavily.

Analysts had on average been expecting like-for-like sales to decline 1.5% over the half. They expected pre-tax profits to slide 13% to £383 million from £440 million a year earlier.

Seven of the craziest supermarket glitches
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Morrisons sees more sliding profits

One of the most popular glitches, was a wine deal at Tesco back in November 2012, where a series of offers clashed, leaving a bottle of £9.99 wine selling for £1.50.

The 'three wines for £10' deal apparently clashed with a '25% off when you buy six or more bottles' deal. The 25% was accidentally taken off the original price rather than the reduced one, leaving the wine at rock bottom prices. Deal-hunters cleared the shelves around the country.

Perhaps the most popular glitch from Tesco came in June 2011, when instead of taking £4 off the cost of a £20 case of beer, the supermarket accidentally started selling the cases for £4. The ensuring rush was nicknamed the 'beer stampede'.

Sadly not every supermarket pricing glitch comes with such a happy ending for consumers. In March last year the bargain-hunters thought their luck was in, when Tesco accidentally priced the new iPad at just £44.99 instead of around £650. Sadly it spotted the mistake before shipping the goods. The small print on its website meant it could refuse to sell at this price, and refund their customers instead.

In September 2012, Asda was responsible for one of the most expensive glitches. The Asda Price Guarantee offered vouchers to customers who could have got their shopping cheaper elsewhere.

However, when certain trigger products were in the basket, the supermarket massively under-priced the shopping at other supermarkets, and offered huge vouchers to shoppers. In many instances the vouchers came to roughly the same as the cost of the shopping.

In April, a mistake on their website resulted in Tesco selling 8 packs of Bulmers cider 568ml bottles for £5 - rather than a six pack for £8.

Deal-hunters snapped up the deal online, and had varying degrees of success. Some had their order delivered in full, others had six delivered for £5 - and were able to negotiate their way to another two, while others were offered six for £5 or their money back.

October last year saw one of the most famous glitches, when Tesco Terry's Chocolate Oranges were subject to two deals at the same time, and the price dropped from £2.75 to 29p. There were plenty of people getting chocolate oranges last Christmas.

A buy-one-get-one-free deal went awry at Tesco in March. People putting four tubs of I can't Believe It's Not Butter or Oykos yogurt packs into the trolley were only being charged for one.

Soon the online deal-hunting community was in action, with one person bagging 50 tubs of butter and 22 pots of yogurt for £8.79 - a saving of £133.89.

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