Morrisons' profits drop 51% despite 'biggest ever' marketing drive

Morrisons has blamed challenging trading conditions for a fall in turnover and pre-tax profits in the wake of its "biggest ever" marketing campaign.

Morrisons reports sales and profits down in the wake of "biggest ever" marketing campaign
Morrisons reports sales and profits down in the wake of "biggest ever" marketing campaign

Total turnover for the six months to 3 August fell 4.9% to £8.5bn and pre-tax profits tumbled 51% from £371m to £181m. Like-for-like sales, excluding fuel and VAT, dropped 7.4%.

However, chief executive Dalton Phillips said the supermarket was "encouraged by the progress" made since implementing the start of a three-year turnaround plan six months ago.

In May, Morrisons launched "I’m Cheaper", a TV, print and outdoor marketing campaign designed to reposition the brand as a "value led" grocer and up its price credentials.

Phillips claimed there was an "enormous amount of change and modernisation" in progress throughout the business. 

"We have cut prices with a big bang with our biggest ever marketing campaign. We have made Morrisons an easier place to shop... This is only a start but we are sure the signs of change are beginning to resonate with customers," he said. 

As part of the turnaround, Morrisons also revealed it would launch a loyalty card "soon" after a successful trial.

Phil Dorrell, director of retail consultancy, Retail Remedy, said the results portrayed a "brutal reality" for Morrisons.

"My worry is that a strategy that revolves around price cutting is a dangerous one," said Dorrell.

"'I'm cheaper' screams out 'I'm desperate'. And the discounters Aldi and Lidl, who own this terrain, are closing in," he added.