Morrisons revenue tops £18bn but earnings fall

Bradford-based supermarket giant Morrisons said its revenue for the 52 weeks ending October 30, 2022, rose 2.2% to £18.4 billion.

Group like-for-like (LFL) sales ex-fuel fell 4.2%.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was down 15% year on year at £828 million.

“With continued high food inflation, rising interest rates, an ongoing cost of living crisis and the war in Ukraine set to enter its second year, there is a continuing sense of uncertainty in consumer sentiment,” said Morrisons.

US private equity firm Clayton, Dubilier & Rice completed a £7 billion takeover of Morrisons last year.

In its outlook, Morrisons said: “During 2022/23, we expect continued cost and other inflationary headwinds, but we are confident that improved trading momentum and our various cost saving programmes will more than offset these, and expect EBITDA to be up year on year.

“In addition, we have identified several working capital opportunities and are now planning for an improvement of at least £500m in the medium term.”

Morrisons CEO David Potts said: “In a very difficult period for consumers and businesses alike, we are continuing to do everything we can to keep prices down for customers and to support our colleagues.

“As a vertically integrated retailer, we felt the impacts of last year’s racing inflation more immediately than our competitors and this did have an impact on our pricing position.

“However, since October we have executed a rolling programme of meaningful price cuts, price freezes and fuel promotions for our customers and our competitive position has considerably sharpened.

“I’m particularly pleased with the impact of the changes to our entry level range in early January with over 130 Savers prices cut and the range increased, which has been really popular with our customers.

“Our Christmas trading continued the positive momentum of the last two quarters with a 2.5% increase in sales against last year, as we pulled out all the stops to help our customers celebrate with style and great quality, despite the economic uncertainty.

“Looking ahead, this current year has many opportunities.

“We have clear plans in place to continue to invest in price and in hours in our stores; to open new supermarkets and further refresh the core estate; to invest in McColl’s and accelerate the conversion programme; to develop further the fast-growing My Morrisons app and to grow volumes through our unique food making operations around the country.

“Together I’m confident that these moves will enable us to make further significant progress in developing Morrisons into a broader, stronger, more accessible and more popular business.

“Throughout the year Morrisons colleagues once again rose to the occasion and their warmth, professionalism and passion for looking after our customers makes Morrisons what it is today.

“Their understanding of the impact of the cost of living crisis on individuals, families and communities, and their determination to give help and support, is evident in our stores every day and I want to thank them for their phenomenal effort over last year.”