Analysis: Morrisons dip forecast but it’s too early to judge new boss

editorial image
0
Have your say

Morrisons are expected to report a fall in like-for-like sales on Tuesday - but there should not be too much doom and gloom, according to retail analysts.

The spotlight has been on the Yorkshire-based chain’s new chief executive David Potts, who has just experienced his first festive period at the helm. There has been drastic change at the company so their imminent trading statement will be viewed with interest.

Analysts are expecting a fall of between 1.5 and 2 per cent in the nine-week period, but this would be an improvement on the 2.6 per cent fall in the period leading up to November 1.

Retail analyst Clive Black said: “David Potts came in during March. He has only had his support around him from August, having got commercial, retail and HR directors in place. It’s a narrow base to judge him on.

“There is no magic button in supermarkets. The management of Morrisons have got a much firmer grip of the tiller now, having been dealt a difficult set of cards.”

Black feels that, if the figures come in as expected, then the market “will take it in its stride” and anything better than a 1.5 per cent fall would be “well-received”. His verdict is that Morrisons are engaged in a slow but steady recovery. From an operating perspective, judging from store visits, there are promising signs to be found.

Morrisons had been hit by their foray into convenience stores, deemed in the wrong locations, and competition from Aldi and Lidl. Their figures in November were dragged down by the move to limit vouchers in favour of lower prices.

Tesco and Sainsbury’s are to follow by releasing their figures later in the week.