Morrisons is struggling and it's trying to save cash by downsizing its HQ

British supermarket Morrisons revealed that like-for-like sales, excluding fuel, tumbled by 2.9% for the 13 weeks toMay 3.

In an interim trading statement, Britain’s fourth largest supermarket insisted twice that it is “listening hard to customers and colleagues and, wherever possible, we are responding quickly,” as hinted that profits will be lower in the first half of the year, compared to the second half of 2015.

“We anticipate that underlying profit before tax will be higher in the second half than the first,” said the group in a statement.

“A full assessment of the business is underway, and we will provide a more detailed update at the time of the Group’s interim results in September. However, as outlined at the 2014/15 preliminary results, the focus continues to be to invest more for customers in order to build trading momentum.”

Morrisons said it has reduced selling space by over 50,000 square feet after it closed more stores than it opened during the period. It added that it will “simplify” its head office, in other words cut jobs, to save up to £40 million over the next two years.

“My initial impressions from my first seven weeks are of a business eager to listen to customers and improve. I have been very pleased by the desire and support of colleagues, and by the genuine warmth and affection for Morrisons shared by both colleagues and customers,” said David Potts, who became the CEO of Morrisons on March 16, this year.
“This is a business with many attributes, some unique. Our task is to use those advantages to improve the shopping trip for customers and create value.”

Morrisons, as well as other incumbent British supermarkets are struggling to retain marketshare and sales growth amid a pricing war driven by budget European grocers Aldi and Lidl.

According to research firm Kantar Worldpanel, Morrisons’ marketshare has fallen to 10.9%, from 12.5% in 2012. Aldi’s marketshare has grown from 2.6% to 5.4% over the same period while Lidl’s has expanded from 2.5% to 3.8%.

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