- Supermarket’s grew 3.5% to £4bn last quarter, down from 4.2% growth
- Morrisons target £1bn in costs savings by the end of its financial year
The boss of Morrisons has said shoppers are ‘feeling the squeeze’ as the grocer battles a slowdown in sales growth and higher costs following the Budget.
Rami Baitieh said the beleaguered supermarket was facing ‘significant cost headwinds’ after sales grew 3.5 per cent to £4billion for the three months to 27 July.
This was a slowdown compared to a 4.2 per cent uptick in the previous quarter.
Baitieh’s remarks echoed those of the chief executive of Aldi UK, who just days ago warned that shoppers are still ‘finding things difficult’.
Baitieh said: ‘Consumers are feeling the squeeze and we are continuing to work hard to help our customers make the most of stretched household budgets, staying true to Morrisons values of providing good affordable fresh food for all.
‘As we do this, we are also managing the incremental impact of the Autumn budget and other Government legislation, which has created significant cost headwinds, some of which were unexpected at the start of the financial year.’
Morrisons share of the grocery market fell to 8.5% over the three months to 6 September
He has been attempting to revive the Bradford-based business after its fortunes slumped following its takeover by private equity.
The retailer axed 365 roles, including across its cafes, convenience stores and food counters, earlier this year in a bid to mitigate extra costs after last year’s Budget.
Increases including the hike in employer National Insurance contributions and a new packaging levy have hit supermarkets hard.
Morrisons said it made £63million of cost savings in the quarter and expects to hit a £1billion target by the end of its financial year.
It has recently slashed prices on 650 everyday items amid a fierce battle in the grocery sector for customers.
Industry data published today revealed that Morrisons share of the grocery market was 8.5 per cent over the three months to 6 September, compared to 8.8 per cent over the same period a year ago.
The data from NIQ lays bare the scale of the turnaround challenge at Morrisons, which has struggled since it was bought by Clayton Dubilier & Rice for £7billion in October 2021.
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