Under-pressure Morrisons said to be planning property sales

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MORRISONS declined to comment on reports that it is preparing to raise £800m from property sales to appease City investors angry at the Yorkshire retailer’s poor Christmas sales.

The Bradford-based supermarket giant is said to be eyeing
up the sale and leaseback of
up to 10 per cent of its freehold stores.

The group, the region’s largest quoted company, plans to return the cash to shareholders via dividends or share buybacks, according to The Sunday Times.

A spokesman told the Yorkshire Post: “We announced a review of our property portfolio at our interims in September and we’ll update on this in March.

“I’m not going to speculate now about the results of that review but we said that we will remain ‘overwhelmingly freehold’.”

Morrisons is facing growing pressure from investors after reporting a worse than expected 5.6 per cent decline in like-for-like sales.

It warned that profits will fall short of City expectations.

Dalton Philips, the chief executive, blamed a combination of shoppers failing to trade up from the discounters over Christmas, its lack of online and convenience stores and the proliferation of vouchers offering mass discounts from rivals.

The group hopes to overcome these issues with a ramp-up in convenience store openings, a new loyalty scheme and, perhaps most significantly, the launch of its online service.

Morrisons launched its dot-com offer in the Midlands on Friday with Mr Philips completing the first delivery.

The spokesman said: “We’re really happy about the launch. On the first day, we had hundreds of orders and it will only increase when people see our distinctive yellow vans on the road.

“We had very high levels of customer satisfaction. Of course, there was the occasional delivery where we didn’t get it 100 per cent right but we’re actively seeking feedback to make sure that any
initial problems are sorted
quickly.”

He added that Morrisons starts taking orders in Yorkshire from 11am today and will start deliveries from 7am on February 3.

The Morrisons.com offer replicates in-store services provided by the company’s Market Street butchers, bakers and fishmongers. A virtual butcher enables customers to choose how thickly their steak is cut. Orders are then prepared by Morrisons’ academy-trained butchers.

Other features of Morrisons.com deal with customer concerns about the freshness of the food bought online, the variability of delivery charges and convenience of online food deliveries.

Morrisons expects to be covering 50 per cent of the country by 2015.

Speaking to the Yorkshire Post on Thursday, Mr Philips admitted that the group had not anticipated the strength of online and convenience shopping over Christmas.

He estimated that a lack of convenience and online sales knocked 200 basis points off like-for-like sales, which means that sales would have fallen by 3.6 per cent without their impact.

Morrisons said profits will come in at the bottom of analysts’ estimates which range from £783m to £853m.

Asked whether he will still be at the helm this time next year, Mr Philips said: “I have a big job to do in terms of leading this strategy. My job is to execute that. Launching online is a big day for us.

“I’m very committed to what we’re doing.”

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