Morrisons raises savings target to £1bn as turnaround gains pace

Morrisons has increased its cost savings target to £1bn after posting an uptick in first quarter sales.

The supermarket saw group revenues rise 2.4% to £4bn in the 13 weeks to 26 January, up 2.1% on a like-for-like basis bolstered by a strong performance of its More Card loyalty scheme.

Chief executive Rami Baitiéh said the retailer had “made exceptional progress in a very short time” against its £700m saving target, as it delivered a further £56m in savings in Q1.

He expects the business to hit its original target ahead of schedule in the second quarter, and aims to deliver £1bn in savings in the medium terms, “which will help us offset cost headwinds, invest for customers and remain competitive in a fast-changing market”.

Baitiéh added: “Despite a challenging environment, Morrisons has made exceptional progress in a very short time and that is entirely down to the hard work, positivity, talent and customer focus of the colleagues in our stores, in our foodmaking sites and in our operations across the country.

“As I outlined in January, the cyber-attack on Blue Yonder caused a far-reaching period of disruption across the businesses, affecting our stock accuracy, availability, waste and forecasting.

“Despite this I am very pleased that we are reporting an increase in like-for-like sales in the quarter of +2.1%.”

Morrisons unveiled its new operations optimisation programme on Monday (24 March), which includes the closure of 52 cafés, all 18 of its Market Kitchens, 17 convenience stores, 13 florists, 35 meat counters, 35 fish counters, and four pharmacies.

While most affected staff members are expected to be redeployed to suitable roles within the business, approximately 365 employees face the risk of redundancy.

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