Morrisons reported a 47 per cent dip in half-year profits is it announced the proposed closure of 11 supermarkets in a bid to increase the retailer’s core strength.
Profit before tax fell to £126 million in the results for the six months to August 2. Like-for-like sales declined 2.7 per cent and turnover fell 5.1 per cent to £8.1 billion.
The decision to close the 11 stores is part of the firm’s £1 billion cost-saving program in a bid to improve competitiveness and regain company strength. They will include a restructuring cost of £20m.
The financial results come a day after Morrisons announced the sale of 140 M local stores to an investment firm headed by entrepreneur Mike Greene backed by Greybull Capital.
David Potts, chief executive, said: "The immediate priority is to deliver a better shopping trip to stabilise trading performance. Our six strategic priorities will then deliver improvement in the core supermarkets, where we have the greatest opportunity.
"It will be a long journey. We approach the challenge with energy, confidence and many strengths, particularly our strong balance sheet and cash flow, which enables investment in improving the customer shopping trip."
Net-debt reduced by £254m since the year end, to £2.09bn.
The announcement comes with amid a high-profile retail price war which has grown in intensity over the past two years.
The UK’s traditional ’big four’ supermarkets and other retailers have attempted to fight the increasing market share of discounters Lidl and Aldi by increasing price competitiveness on various groceries.