British supermarket group Morrisons announced on Tuesday that its new CEO’s initiatives to enhance price competitiveness and develop a loyalty program are yielding positive results, as evidenced by a 4.1% increase in quarterly underlying sales.
Rami Baitieh, the former head of Carrefour France, joined Morrisons in November last year and expressed dissatisfaction with the company’s performance in January.
He introduced a scheme in February to match the prices of key items with those of discounters Aldi and Lidl. “It has had a great start,” Baitieh stated, while noting that the customer response to the ‘More Card’ loyalty program “has been very positive.”
Currently, 50% of transactions utilize the loyalty card, and Morrisons aims to increase this to 70% over the medium term.
Baitieh also revealed plans to expand the number of convenience stores to 2,000 by 2025, up from the existing 1,600-plus locations.
Despite these initiatives, industry data from last month indicated that Morrisons continues to lose market share and lags behind the sales growth of market leaders Tesco and Sainsbury’s.
Owned by U.S. private equity firm Clayton, Dubilier & Rice (CD&R) since 2021, Morrisons reported a 16% rise in underlying earnings, excluding its fuel business, reaching 321 million pounds ($408 million) in the six months ending April 28.
In January, Morrisons agreed to a 2.5 billion-pound deal to sell 337 petrol forecourts to Motor Fuel Group, another CD&R-owned entity.
Unlike its main competitors, Morrisons operates its own production facilities, making half of the fresh food it sells.
Since its acquisition by CD&R, Morrisons has been burdened by significant debt.
However, the company reported that its net debt has decreased to 4 billion pounds, a 35% reduction from a peak of 6.2 billion pounds.
In the second quarter from February to April, Morrisons reduced costs by 78 million pounds, bringing the total savings for the year to over 450 million pounds, aligning with its three-year target of 700 million pounds.