Dalton Philips in an M Local store

Dalton Philips in an M Local store

Morrisons has unveiled plans to expand its UK operation as it reported a 0.9 per cent drop in like-for-like sales for the six months ending 29 July.

The retailer’s pre-tax profits fell two per cent to £440 million in the same period, a slight improvement on industry projections that stood around £434m.

“Our consumers are worse off than they were a year ago and putting fewer items in their baskets; we are seeing more customers than ever before carefully searching for value,” said CEO Dalton Philips.

The supermarket hopes to increase its six per cent market share in London by opening a new bespoke 100,000 sq ft distribution centre in Feltham, west London early next year with the capacity to service 100 M Local convenience stores. It also plans to open 15 new M Local stores by the end of the year as it looks to a gain a greater grip of the convenience-store market.

Philips has defended the supermarket’s fresh format strategy, which some analysts have claimed is too “high brow” and turning away core customers.

“It doesn’t make much sense to me. We have been taking down the walls in the stores for the fresh format strategy so we can better promote fresh food,” he said.

The retailer’s Fresh format is now in 45 stores and Phillips said it will grow to 100 by the end of the year.

“Although the sustained pressure on consumer spending was reflected in our like-for-like sales performance, we have made further good progress against our strategic objectives - the building blocks which are the foundations of the future success of our business,” concluded Philips.

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