Britain’s fourth-largest grocer WM Morrison saw its underlying pre-tax profit for the first six months of this year plunge 51 percent as it continues to struggle in the middle ground between budget and high-end retailers.
The group said like-for-like sales fell over 7 percent for the period, but the supermarket confirmed investors would still see dividend growth this year as chief executive Dalton Phillips pledged the chain was getting “back on the front foot”.
“We are six months into the three-year plan that we set out in March and, although it is early days, I am encouraged by the progress we have made,” Phillips said in a statement. He added he remains confident the business will generate £2 billion ($3.24 billion) of cash and £1 billion of cost savings over three years.
Morrison’s, which holds roughly 11 percent of market share, posted underlying profit before tax of £181 million, compared with £401 million in the same period last year.
Tesco slashed profit expectations for the year and cut its dividend, as it confirmed former Unilever executive David Lewis, would take up his role as CEO a month early at the start of September.
“What’s missing in the Morrisons story right now is a consistent, sustainable market strategy,” Brian Roberts, Retail Insights Director at Kantar Retail told CNBC. “Morrisons really is missing a trick here. ”
Shares in Morrisons traded over 4 percent higher shortly after market open, as traders welcomed the results as slightly better than expected. Year to date shares are down almost 30 percent. Rival retailers Tesco and Sainsbury’s gained around 1 percent.
Meanwhile online grocer Ocado jumped over 6 percent in early trade after reporting that retail sales rose in its third quarter. The average order size fell, however. Ocado struck a deal with Morrisons to provide its online grocery operation which was launched in January.