What­ever Next

High street chain shelves woes to see shares soar

The Daily Telegraph - Business - - Front Page - By Ash­ley Arm­strong

SU­PER­MAR­KET boss David Potts hailed a “new Mor­risons” af­ter the Brad­ford-based gro­cer yes­ter­day de­liv­ered a 40pc jump in prof­its and its sev­enth quar­ter of sales growth in a row.

Since tak­ing charge of Mor­risons two years ago, Mr Potts has sta­bilised the once strug­gling re­tailer by lur­ing shop­pers back to its stores with lower prices, re­fur­bish­ing shops and im­prov­ing its food ranges with the ad­di­tion of a pre­mium “Best” line.

“The most im­por­tant thing is the re­cov­ery of our su­per­mar­kets but we have also been build­ing a broader busi­ness,” said the Mor­risons boss. Most re­cently, the su­per­mar­ket has been mak­ing the most of its Bri­tish man­u­fac­tur­ing fa­cil­i­ties and sup­ply chain by seal­ing whole­sale deals with Ama­zon, petrol sta­tion group Ron­tec and most re­cently con­ve­nience chain McColl’s.

The gro­cer has said it ex­pects to make £1bn of whole­sale sup­ply sales in due course. “We are not a one-club golfer,” said Mr Potts. Mor­risons has been fo­cused on strik­ing “cap­i­tal light” sup­ply deals, rather than en­gage in the con­ve­nience takeover frenzy sparked by Tesco’s £3.7bn swoop on Booker, or the bid­ding con­test be­tween Sains­bury’s and Co-op for Nisa. “We said we would look at whole­sale 18 months ago, be­fore it be­came fash­ion­able,” said Mr Potts in ref­er­ence to the re­cent spate of deal­mak­ing.

Mor­risons’ pre-tax prof­its jumped to £200m in the six months to July 30, up from £143m in the same pe­riod of last year. Un­der­ly­ing prof­its, mean­while, rose by 12.7pc to £177m, beat­ing an­a­lyst fore­casts. “Mor­risons has quite sim­ply been trans­formed over the past two years,” said John Ib­bot­son, di­rec­tor of re­tail con­sul­tancy Re­tail Vi­sion. “Given the cut-throat mar­ket we are in, this has been one of the great re­tail turn­arounds,” he added.

Like-for-like sales rose by 3pc over the half year, com­pared to a rise of 1.4pc in the pre­vi­ous year. Its shares closed down 5.1pc at 232.4p.

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