The UK's Morrison Supermarkets has reported first-half earnings that missed analysts’ estimates as price cuts contributed to a decline in same-store sales.
Underlying pretax profit fell 35 per cent to £117 million ($180 million), the smallest of the U.K.’s four main grocery chains said in a statement on Thursday. Analysts expected £134 million, according to the median of 14 estimates compiled by Bloomberg. Morrison also said second-half earnings on that basis will exceed that of the first.
“The immediate priority is to deliver a better shopping trip to stabilize trading performance," chief executive officer David Potts said in the statement.
Potts, about six months into the role, has adopted a back-to-basics approach to improve Morrison’s larger stores. He has cut prices and recruited an additional 5,000 shop workers in an effort to halt a slump in sales that stretches back to 2011. The retailer announced the sale of 140 convenience stores on Wednesday for £25 million.
Same-store sales dropped 2.4 per cent in the second quarter, compared with analysts’ estimate for a 2 per cent decline. They fell 2.9 per cent in the first quarter and by 5.9 per cent last year as a whole.
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