Morrisons plans food website after disappointing Xmas sales

09/01/2013

Supermarket Morrisons is planning an online food as part of a "modernising" drive to recover from poor Christmas sales. Chief executive Dalton Philips said Philips said the group would provide more details in the spring but said being the last major supermarket to offer food online would bring it some "late-mover" advantages.

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Philips added that the group, with 482 stores, had to become a "more modern business" after shoppers flocked to its rivals over the festive period sending total sales in the six weeks to December 30 down 0.9 per cent.

Same-store sales dropped 2.5 per cent having fallen 2.1 per cent in the previous quarter. Profits for the year, helped by cost-cuts, will be broadly in line with expectations. Its shares fell ¾p to 256p.

"The importance of online and convenience shopping has accelerated particularly with shoppers worried about high petrol prices. These two channels were the major headwinds for us over Christmas and made us vulnerable," he said.

"We are looking closely at an online service and like what we have seen so far."

"After looking at our rivals' services we know we can produce something special. We're not too late to the party as it is a market where for 12 years people haven't made money . I feel confident in where we are going," he said.

The group has also vowed to open 70 convenience stores this year, up from 12 today and "shout louder" about its fresh food offering helped by its new advertising tie-up with Geordie TV duo Ant & Dec.

Philips said the "disappointing" sales figures were also the result of customers being more cost-conscious in their festive food and drink shopping.

"About a third of customers came armed with a shopping list, that's much more than we have seen before," he said. They still wanted to celebrate but instead of buying three bottles of champagne as they did last year, they bought two."

The group's promotions also largely failed to attract these "value conscious" customers but Philips vowed to be more innovative in 2013.

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