Financial News

  • 23 June 2014, 21:12

Morrisons Expands Supermarket Price War

Supermarket chain Morrisons has announced more price cuts as it attempts to halt a decline in sales.

It said more than 130 "everyday items" would see reductions and that the average price cut would be 14%, with some items discounted by more than 30%.

The news comes after the struggling supermarket announced a massive round of what it said were permanent price cuts to more than 1,000 items.

In a statement, Morrisons said: "Cuts will be across a mix of everyday products, predominantly in the grocery and household areas of store.

"The announcement comes in the same week as a sharp fall in inflation and the first decrease in food prices for eight years."

In March the chain, which has suffered amid strong challenges from discounters and because of its slow response to the online grocery and convenience markets, confirmed a pre-tax loss of £176m for 2013/14 after profits of £879m in the previous 12 months.

Chief executive Dalton Philips subsequently waived his £374,000 bonus.

The company later revealed a like-for-like sales decline, excluding fuel, of 7.1% in the 13 weeks to May 4.

Morrisons has seen its share price tumble by around a third in the last year.

The supermarket chain recently embarked on price cuts of £1bn over three years to take on the flight to discounters, which has affected sales at the so-called 'big four' chains.

Mid-market supermarkets have suffered in recent years amid the rise of German discount chains Aldi and Lidl at one end, and premium outlets M&S and Waitrose at the other.

On Friday, Sainsbury's announced a tie-up with Danish discounter Netto in a trial return to the UK market.

Last week, Morrisons also confirmed plans for 2,600 job cuts.

A statement detailing the changes said the losses, representing 2% of its workforce, would result from cutting tiers of in-store management.

But the company insisted it could improve customer service at the same time, because more staff would be focused on serving shoppers.

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