Morrisons cuts price of 847 products

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Morrisons is cutting the price of 847 products as it steps up the battle to win back customers from budget chains like Aldi and Lidl.

The cuts average 20 per cent and focus on grocery items that are a core part of Morrisons’ shoppers’ baskets such as bags of sugar, rice, and cereals.

David Potts of Morrisons

David Potts of Morrisons

A spokesman for Bradford-based Morrisons said: “Price Crunch is a rolling programme of lower prices, typically lasting a minimum of three months.”

Items included in the “price crunch” include nappies, bread and tea bags.

Andy Atkinson, Morrisons’ marketing and customer director, said: “We continue to listen hard to customers who say they want lower prices on staples and everyday family essentials.

“We are continuing to cut every price we can, as we make Morrisons even more competitive and improve our customers’ shopping trip.”

Morrisons will also provide its latest snapshot of trading when it updates the City on Thursday.

The Bradford-based group is enjoying an improved performance, after revealing in March that it bounced back into profit after posting its first quarterly sales growth for four years.

It reported a pre-tax profit of £217 million in the year to the end of January, compared with a £792 million loss the previous year, after it made large writedowns across the value of its store estate.

The group also revealed a 0.1 per cent rise in like-for-like sales for the fourth quarter of the year, its first quarterly rise since 2012.

Clive Black, retail analyst at Shore Capital, said Morrisons is likely to show a continuation of the improving underlying sales momentum shown in its fourth quarter.

But ongoing price deflation could see the same-store sales figure brought down to zero.

Morrisons chief executive David Potts, who took over from the ousted Dalton Philips a year ago, has made a number of changes as he bids to turn around the firm’s fortunes.

Mr Potts has got rid of 800 surplus head office jobs, brought in 5,000 more in-store staff, hiked staff salaries and slashed prices in a bid to return the grocer to its former glories. One year into the job, his efforts appear to be finally paying off.

“Customers are coming back. They come back when we get things right. Customers want us to be more competitive, ” Mr Potts said recently.

“They want better service and less gaps on the shelves.”

A recent Which? report claimed that Morrisons has overtaken Leeds-based Asda as the cheapest main supermarket following Morrisons’ 1,000 price cuts earlier this year.

Which? said Morrisons has unseated long-standing champion Asda, which has been cheapest every month since it started tracking in July 2013.

Mr Potts said in March: “There is an affection for Morrisons, and as we provide what people truly care about, there is an opportunity to increase the popularity of the brand.

“Our identity had become blurred, but it is becoming clearer.

He added: “This will be a three phase recovery - fix, rebuild and grow. Customers are beginning to notice and value the improvements.”

In March, Morrisons signed a landmark deal with US online giant Amazon to supply fresh food to its customers.