Key facts
- Morrisons opened 30 new Morrisons Daily convenience stores in the last three months.
- The supermarket plans to open hundreds more Morrisons Daily stores in the coming years.
- Morrisons recently closed 100 unprofitable Daily stores.
- The grocer reported a 2.2% increase in like-for-like sales and 1.7% total sales growth to £4bn.
- Morrisons has reduced its £3.1bn debt pile by 46% since 2023.
- The company achieved £48m in cost savings in the last quarter.
Morrisons is pursuing an aggressive expansion of its convenience store brand, Morrisons Daily, opening 30 new locations in the last three months and planning hundreds more, despite recently closing 100 unprofitable sites. This expansion comes as the supermarket reported a 2.2% rise in like-for-like sales and a 1.7% increase in total sales to £4bn, marking its 14th consecutive quarter of growth.
Despite the sales increase, chief executive Rami Baitiéh expressed caution due to highly competitive trading conditions and a challenging economic backdrop. He noted concerns about input inflation, particularly in light of potential disruptions to food supply chains. The grocer's performance has been boosted by seasonal events like Valentine's Day, Mother's Day, and Easter, with further optimism for the World Cup and Father's Day.
Morrisons has been focused on reducing its substantial £3.1bn debt pile, accumulated after its £7bn takeover by private equity firm Clayton Dubilier & Rice in 2021. Since Baitiéh took over in 2023, the company has cut its debt by 46% and achieved £48m in cost savings in the last quarter, bringing its total cost-cutting efforts close to its £1bn target.
Analysts have raised questions about the effectiveness of Morrisons' vertically integrated model, which includes owning manufacturing assets. While this provides control over its supply chain for products like meat and fish, it also means cost inflation can impact the retailer earlier than competitors such as Tesco and Sainsbury's.