Morrisons has revealed its grocery and food-making businesses fell to a fresh £22m loss during the latest quarter as the supermarket battles inflated debt costs and sluggish sales growth.
While losses have narrowed from £39m compared to the same period last year, the retailer fell into the red once again after a £110m hit from its debt finance bill.
The latest losses, covering the 13 weeks to the end of July, account for Morrisons’ supermarkets, convenience stores and wholesale manufacturing division, stripping out the £2.6bn generated from the sale of its petrol forecourts in April.
Bosses are attempting to improve Morrisons’ sales growth at the same time as reducing the retailer’s debt pile, which has been a problem ever since the company was bought by Clayton Dubilier & Rice (CD&R) for £10bn in 2021.
Morrisons said its total debt had fallen to £4bn at the end of July, down from an earlier peak of £6.2bn.
Attempts to reduce borrowings recently benefited from a £331m deal to sell ground leases on 76 supermarkets, which was announced by the business on Thursday.
It comes as Rami Baitiéh, who joined Morrisons as chief executive last November, attempts to steer an ambitious turnaround plan to revive sales, including more price-matching against the German discounters Aldi and Lidl.
Aldi leapfrogged Morrisons to become Britain’s fourth largest supermarket in 2022, with the latter yet to regain its position.
Morrisons currently holds around 8.5pc of the grocery market, according to industry analysis from Kantar, compared to Aldi’s 9.9pc.
Mr Baitiéh has said he is listening more to customers to try win them back, including adding his email address to Morrisons’ website for shoppers to give their views.
Recently, he told The Telegraph that Morrisons was reviewing self-checkouts in stores as part of his plans to “reinvigorate” the supermarket, admitting that it had gone “a bit too far” with rolling out the technology.
Mr Baitiéh said sales growth in the latest 13-week period had remained positive, up 2.9pc on a like-for-like basis. However, it had slowed from the previous period, when Morrisons recorded growth of 4.1pc.
Mr Baitiéh said the market was “noticeably softer” but claimed Morrisons “relative position” had improved.
Over the past year, Morrisons has been attempting to avoid empty shelves by rolling AI cameras to monitor when products are missing.
Mr Baitiéh said availability had improved in stores where the technology has already been added: “This system is bringing down the in-day replenishment times significantly, which in turn is having a positive effect on availability, sales and customer satisfaction.”
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