Retail experts have criticised Morrisons’ claim that sales and core profits could be hit this year due to shoppers trying to cut costs due to rising inflation and war in Ukraine.
Inflation is expected to reach 9% later this year with living standards forecast to fall to the lowest level since the 1950s, according to the Office for Budget Responsibility.
The Big 4 grocer said to Sky News: “We are taking steps to mitigate the impact of these developments on our EBITDA (core earnings) for the remainder of the year.
“Unless these conditions improve, the impact of these developments could have a material adverse effect on our sales and EBITDA for the year.”
READ MORE: Virgin Wines issues profit warning on rising inflation
On the other hand, The Retail Mind director Ged Futter said in a blog post on LinkedIn: “Is it any surprise that we see a profit warning less than a week after Kantar announce their market share is going back at 14.5%?”
“If your sales are increasing by 9% but your market share is falling by 14,5% then you have a problem, the only option available is to put your prices up.”
Kantar reported that despite higher prices in stores, supermarket sales had fallen by 6.3% in the 12 weeks to 20 March 2022 year-on-year.
However, Both Lidl and Aldi have seen a massive resurgence in sales this year as both grocers grew by 3.6% year on year.
Futter added: “Customers’ eyes are wide open to where they can find value, when they see an alternative they will run towards it & they won’t come back.”
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1 Comment. Leave new
I note that Morrisons core condition of being corrupt hasn’t changed.