Supermarket giant Morrisons has revealed a 35% drop in pre-tax profits over its first half and plans to close 11 more stores, with up to 900 jobs under threat.

Morrisons has successfully used mobile phone location data to encourage new shoppers into its stores

  • First-half underlying pre-tax profits fall 35%
  • H1 like-for-likes slip 2.7%
  • Plans to close 11 more stores
  • Closures to result in up to 900 job losses
  • Boss David Potts reveals six-point turnaround plan

The struggling grocer reported that underlying pre-tax profits in the six months to August, including restructuring costs, were £117m. Like-for-likes, excluding fuel and VAT, in the period fell 2.7%. Total sales slipped 5.1% to £8.1bn. In Q2, like-for-likes fell 2.4%.

Chief executive David Potts is attempting to revive the business, but admitted today: “It will be a long journey.”  

He added: “The immediate priority is to deliver a better shopping trip to stabilise trading performance.” He claimed customers and staff are “beginning to notice improvements”.

He also revealed details today of a six-point turnaround plan. His priorities are: to be more competitive; to serve customers better; find local solutions; develop popular and useful services; to simplify and speed up the organisation; to make the core supermarkets strong again.

Potts is assembling his own streamlined leadership team and a host of senior staff have left the grocer since he took charge.

Morrisons also revealed that the closure of 11 more stores will mean a “restructuring” cost of £20m. It could mean up to 900 job losses.

It comes a day after the group confirmed it had sold its M Local convenience business, resulting in a loss of £30m. However, it said today: “Convenience remains an important growth channel, and we will continue to consider capital-light, returns-enhancing opportunities in the future.”

Morrisons said it expects food deflation to continue, despite some commentators predicting food price inflation to return.

Looking ahead, the grocer predicted its underlying pre-tax profits to be higher in the second half than the first, but did not give more detail.