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Morrisons' and Waitrose's profits slide as Ocado sales jump

Published:  12 September, 2014

Morrisons and Waitrose are the most recent losers of the fierce supermarket price wars that have erupted across the UK in the last year. WM Morrison reported just over a 30% decline in half-yearly profits on Thursday, while Waitrose which had remained relatively unscathed by the competition, reported a 9.4% drop in profits for its half yearly results.

Morrisons and Waitrose are the most recent losers of the fierce supermarket price wars that have erupted across the UK in the last year. WM Morrison reported just over a 30% decline in half-yearly profits on Thursday, while Waitrose which has remained relatively unscathed by the competition, reported a 9.4% drop in profits for its half yearly results.

OcadoOcadoOcado, online grocery retailer

But there was better news for Ocado, the online retailer that services both Morrisons and in some parts of the country, Waitrose, reported a 22.5% rise in sales for the last 12 weeks to August 10.  Its group sales jumped from £189.2 million to £231.9 million for the same period last year.

Ocado's chief executive officer, Tim Steiner, was pleased with the continued sales growth.  He said: "We are pleased with the continued steady growth in our business despite the increasingly competitive nature of the market. This performance also further demonstrates the ongoing shift to online grocery shopping."

Despite the strong financial performance of Ocado, Steiner admitted that retail environment is becoming increasingly more competitive.  "The retail environment is challenging with an increased level of promotional activity and price reductions across the industry," said Steiner.

Steiner was not alone in the feeling that the retail environment is fierce. Sir Ian Gibson, non-executive chairman at Morrisons, said: "Conditions are tough, and the industry is going through unprecedented change. Our first-half results reflect the reset of the business we announced in March."

Waitrose

MorrisonsMorrisons

Dalton Philips the chief executive at Morrsions said: "We are meeting the challenges of structural change with decisive action and are on track to become a more distinctive value retailers for the next generation of grocery retail."

WaitroseWaitroseWaitrose

Waitrose, which is part of the John Lewis Partnership, released a statement that said: "The outlook in the grocery sector remains challenging and we expect that to continue to be the case for some time."

The loss in profit for Waitrose was partially impacted by a higher level of investment in the grocer's core business, not just due to an investment spend in price cuts. The report said: "Operating profit for the half was down by 9.4% to £145.2m. The decline in profit was mainly as a result of the substantial levels of investment made across the business and, to a lesser extent, the tough market conditions."

Despite the hit in profit, market share for the high street grocer increased by 5%.

Ocado, online grocery retailer

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