Potts vows to listen to shoppers at Morrisons

THE new chief executive of ­supermarket chain Morrisons said improving customer service and product availability were key priorities as he looks to turn performance around after it ­reported another drop in sales yesterday.

Morrisons is aiming to have more staff on the shop floor. Picture: Ian Georgeson

The 2.9 per cent decline in like-for-like revenues for the 13 weeks to 3 May came on top of a 7.1 per cent fall posted by the UK’s fourth-biggest supermarket business a year earlier.

David Potts, who has more than 40 years’ retail experience from his time at Tesco, took over as Morrisons chief executive in March after a year in which the Bradford-based chain slumped to a loss of £792 million.

He said: “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. 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.”

Potts is carrying out a review of the business, which he will report back on at the time of the group’s interim results in September. He said the focus in the meantime continues to be to invest more for customers in order to build trading momentum.

He has already announced plans to axe up to 720 jobs from the Bradford head office as part of a drive to beef up staff on shop floors.

Shares fell sharply in the wake of the update, which showed the rate of decline in like-for-like sales had accelerated from the 2.6 per cent fall seen in the previous three-month period.

Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, described the challenge facing Potts as significant.

He said: “A detailed strategic update is not expected until September, in which time rival Tesco will be hoping for ­evidence of early recovery following its new and now implemented strategic plan. On the upside, online sales growth is providing some compensation for falling supermarket sales, whilst management action ­­including simplifying its head office is now being taken.”

Morrisons said it closed more stores than it opened during the period, leading to a reduction in selling space of more than 50,000sq ft. Restructuring efforts, including the head office job losses, will result in one-off costs of between £30m and £40m in the current financial year.

It added that net debt fell by around £150m to £2.2 billion.

On Wednesday, rival Sainsbury’s reported a £72m bottom-line loss, a fortnight after Tesco racked up a deficit of £6.4bn. Both chains were driven into the red by the lower value of their store estates.