Jump to content
House Price Crash Forum
Sancho Panza

Morrisons:like-For-Like Sales Slump 7.1Pc

Recommended Posts

Telegraph 8/5/14

'The challenges facing Wm Morrison have been laid bare after the supermarket retailer reported a 7.1pc slump in like-for-like sales.

The Bradford-based retailer said the grocery market has "continued to be competitive" during the last three months but that its new price-cutting strategy unveiled in March is "on track".

The slide in like-for-like sales, unprecedented in recent times for one of the large supermarkets, covers the 13 weeks to May 4 and is excluding fuel. Total sales for Morrisons were down 4.2pc.

Dalton Philips, chief executive, said: “The plans we set out at our results in March are on track.

:"The reaction of our customers to the 1,200 “I’m Cheaper” price cuts we announced last week has been very positive.

Morrisons has already warned that profits this year will halve as it cuts prices in an attempt to compete against the discounters Aldi and Lidl.

Despite the fall in sales Morrisons said its new online business is performing ahead of expectations and it is still aiming to open 200 M Local convenience stores by the end of 2014.

The trading update from Morrisons, Britain's fourth-largest supermarket, comes a week after the retailer said it had “grasped the nettle” after pledging to cut the price of 1,200 products by an average of 17pc.

However, the Morrisons boss warned that like-for-like sales are “unlikely to improve anytime soon” because the cuts will have a deflationary impact on sales.

Nonetheless, he insisted Sainsbury's was monitoring 15,000 prices a week across the industry and would stay in-line with its rivals.

Mr King added: "We will look at the detail and keep doing things that have served our business well."

The latest market share data from Kantar for the 12 weeks to April 27 shows the grocery market in Britain is growing at the slowest rate for at least 11 years due to price deflation and the discounters grabbing customers.

Aldi and Lidl are growing at a record pace of 36.1pc and 20.9pc respectively, while Morrisons sales slid 3.6pc and Tesco 2.4pc. Sainsbury’s sales growth slowed to 0.3pc, behind Asda’s 2pc increase and the overall market growth of 1.9pc.'

That's one hell of a drop in sales.When discounters are increasing market share at the expense of the big boys,you know it's unlike any recovery you've ever seen before.

Share this post


Link to post
Share on other sites

Same stuff but cheaper. Why wouldn't you shop at Aldi and Lidl? Who cares if the cartons have multiple languages on it? Use the money you save for better things like your child's education or a rainy day? Big supermarkets have long since worked out that all they need to do is push more and more customers through their doors faster and faster and retain a 5% profit margin. Nothing else matters to them. They're even happy to use automated machines that encourage shop lifting as long as it improves throughput and decreases staff wages. Service and food quality are irrelevant in most cases and their aim is to worsen the quality of food but spend more on the packaging to make you believe it is worth more than it is. e.g The farms that exist on the "Oakham Farm" chicken breasts don't actually exist its just a brand name.

Its a sad indictment of the times we have been living in. Get away with what you can and take as much as you can from the masses thanks to glorious capitalism which as far as I can see, takes any item packages it in smaller quantities and then reduces the quality of each item in an effort to sell more and more to a wider audience.

Share this post


Link to post
Share on other sites

he place we are renting now is 3 mins walk from a 'good' ASDA. I hated ASDA back when I used go there in my poorer days in 1999-2004, but I am quite happy with what they are providing these days compared to Tesco and Morrison - and for everything else there is always LIDIL.

Some Morrison stores are good, some terrible. For example my nearest at Burnham-on-sea is completely shite, however the next nearest at Bridgwater is fantastic. I think what it comes down to is small morrison stores are rubish compared to smaller counterparts, where as their large stores are good in comparison.

Share this post


Link to post
Share on other sites

Morrisons was and is my favourite supermarket for several reasons, not least their meat (range, quality, production chain) and fish.

I thought they showed lack of judgement when they installed those fancy stainless steel 'misting' fresh veg stands about a year ago. They looked great but did little for the produce.

Yesterday, I noticed that while the misters were still misting, all the lettuce and carrots were shrink wrapped in cellophane bags, the 'fresh' & 'loose' had clearly disappeared. So, now they are just very expensive counters.

Share this post


Link to post
Share on other sites

I like morrisons.....they are losing out on on-line sales and have not been opening as many small local stores.....take that out of the equation and they are not doing as badly......better not to rush and get it wrong, early days. ;)

Share this post


Link to post
Share on other sites

Wow have you read the AGM reports in the media? Sir Ken Morrison (part of original family) gave a public dressing down to the board.

Share this post


Link to post
Share on other sites

I've always shopped in ASDA. It's always been the shortest distance to walk, wherever I've lived.

But I only use it for boring stuff; tins of tomatoes, bog roll etc. Meat I buy from a butcher (rarely) or direct from the smallholder (preferred). Veg comes from the village greengrocer, roadside stalls, or my garden.

There's no a Lidl next door to the ASDA but I can't say it's markedly cheaper than ASDA - at least not for the stuff I buy.

Share this post


Link to post
Share on other sites

Having recently moved from a house that was quite close to a Morrisons that I often used for convenience I have now discovered Aldi. I can't believe the difference in price for equal if not better quality.

I must admit that it is a bit like supermarket sweep at busy times, and packing your groceries is slightly rushed, but for a saving of 30-40% this is something I can deal with. Unless you have more money than you know what to do with I fail to see how people would shop elsewhere.

Share this post


Link to post
Share on other sites

So that Tesco and Morrison suffering huge drops.

Do we think it is all going to the discounters...or is there some total demand destruction going on due to falling real wages?

A fair chunk is going to the discounters but not all.Interesting source below from which you can see that grocery retailing has been expanding over the last ten years probably much to the detriment of specialist retailers-thinking clothing/electronics etc

http://www.igd.com/our-expertise/Retail/retail-outlook/3371/UK-Grocery-Retailing/

  • 'The UK grocery market was worth £169.7 billion in 2013, an increase of 3.7% on 2012
  • IGD forecast that the UK grocery market value will be worth £205.9bn in 2018, an 21.3% increase on 2013
  • The grocery market's share accounts for 54.9p in every £1 of UK retail spending'

The overall retail spending figures have been rising into April 2014 so that suggests demand destruction isn't here yet.Although that probably depends on which population measure you use.

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/april-2014/index.html

'In April 2014, the amount spent in the retail industry increased by 6.2% compared with April 2013 and by 0.6% compared with March 2014. Non-seasonally adjusted data show that the average weekly spend in the retail industry in April 2014 was £7.0 billion compared with £6.5 billion in April 2013 and £6.8 billion in March 2014.'

Share this post


Link to post
Share on other sites

A fair chunk is going to the discounters but not all.Interesting source below from which you can see that grocery retailing has been expanding over the last ten years probably much to the detriment of specialist retailers-thinking clothing/electronics etc

http://www.igd.com/our-expertise/Retail/retail-outlook/3371/UK-Grocery-Retailing/

  • 'The UK grocery market was worth £169.7 billion in 2013, an increase of 3.7% on 2012
  • IGD forecast that the UK grocery market value will be worth £205.9bn in 2018, an 21.3% increase on 2013
  • The grocery market's share accounts for 54.9p in every £1 of UK retail spending'

The overall retail spending figures have been rising into April 2014 so that suggests demand destruction isn't here yet.Although that probably depends on which population measure you use.

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/april-2014/index.html

'In April 2014, the amount spent in the retail industry increased by 6.2% compared with April 2013 and by 0.6% compared with March 2014. Non-seasonally adjusted data show that the average weekly spend in the retail industry in April 2014 was £7.0 billion compared with £6.5 billion in April 2013 and £6.8 billion in March 2014.'

When money is tight people will spend what they have spare on food....smaller cost, better 'good feeling' hit......you can buy clothes and electricals second hand for next to nothing....you can't buy the food that you need second hand. ;)

Share this post


Link to post
Share on other sites

When money is tight people will spend what they have spare on food....smaller cost, better 'good feeling' hit......you can buy clothes and electricals second hand for next to nothing....you can't buy the food that you need second hand. ;)

But people are obviously flush since house prices are rocketing (again)..... :lol:

Share this post


Link to post
Share on other sites

So that Tesco and Morrison suffering huge drops.

Do we think it is all going to the discounters...or is there some total demand destruction going on due to falling real wages?

You don't shop, cook and eat in when your house price is going up.

Restaurants, hotels and pubs at busiest since 2007

http://www.bighospitality.co.uk/Business/Restaurants-hotels-and-pubs-at-busiest-since-2007-yet-profits-fall-sharply

Share this post


Link to post
Share on other sites

You don't shop, cook and eat in when your house price is going up.

Restaurants, hotels and pubs at busiest since 2007

http://www.bighospitality.co.uk/Business/Restaurants-hotels-and-pubs-at-busiest-since-2007-yet-profits-fall-sharply

Interesting read. It's a copyright paranoia site, so I can't paste.

My read: things are so bad they have to hope for better things. Otherwise ...

Share this post


Link to post
Share on other sites

Having recently moved from a house that was quite close to a Morrisons that I often used for convenience I have now discovered Aldi. I can't believe the difference in price for equal if not better quality.

I must admit that it is a bit like supermarket sweep at busy times, and packing your groceries is slightly rushed, but for a saving of 30-40% this is something I can deal with. Unless you have more money than you know what to do with I fail to see how people would shop elsewhere.

I am a Lidl girl but if I still lived close to a Morrisons I would still use them. They claim to have control over their meat supplies which is important to me so I still go back for that when I can even though the store is no longer very handy.

The main supermarkets need to stop taking the piss out of their customers, I occasionally go to Sainsburys and Tesco if I am passing but their prices are a joke when compared to Aldi/Lidl/B&M etc. I can get almost everything I need from Lidl these days, I wish they would do something about their tills but they have what I need at a sensible price, everyone I have encouraged to go there have been surprised about the experience, both in shop size and also prices. Who needs an aisle of baked beans - as you get in Asda - when most folk buy the same brand anyway?

Share this post


Link to post
Share on other sites

There's pros and cons.

Lidl and Aldi are private companies, so the staff have no free shares, and the public cannot invest in them e.g in their pensions.

Tescos and Sainsburys are listed publicly, if they do well, so do the shares, in terms of dividends.

The big four have more choice, and the discounters less choice and the queues are long at the till because their margins will be smaller, and to keep prices down. Their stores are basic, and someone once said, Lidl/Aldi would be the norm if Communism won. The big four provide choice, but they are caught out when these become slow or stagnant moving lines as people find money is tight.

Share this post


Link to post
Share on other sites

Oddly enough, at the time of writing their share price is UP 2.57%.

When the news is bad look to buy, when the news is good, look for shorting opportunities.

Share this post


Link to post
Share on other sites

Both Tesco and Morrisons have suffered at the hands of the discounters.That will change though and already is.What did the damage was letting the discounters price a lot of basic foods way under supermarkets price.Go back 6 months and a cucumber in Aldi was 45p and 79p in Morrisons.They are now the same.Lettuce the same.

Morrisons milk is now 84p against 99p at Aldi.Morrisons own bread is 59p,Aldis similar quality is 72p.

Once the basics are the same price in the discounters and the supermarket (or less) people will return to the supermarket for the bigger range.

Aldi is a great shop and will continue to do well,but the likes of Tesco and Morrisons have seen the threat and are responding.

Morrisons of course is also the second biggest food manufacturer in the UK.They own the supply chain and even slaughter all their own beef/pigs/lamb etc.That gives them big scope.

What it does show though is we are now seeing big deflation in food prices and thats likely to continue.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   206 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.