Procurement efficiencies help Morrisons boost profit despite fall in sales

7 September 2012

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8 September 2012 | Anna Reynolds

Morrisons made £40m of procurement savings last year - a figure that helped offset a fall in sales and deliver an increase in half-year profits. In the company’s half-year results released this week, underlying profits were up by 1 per cent to £445 million despite a fall in sales.

The supermarket group is now to boost its three-year indirect savings target to £100m by the end of next year.

One of its largest initiatives saw the company retrofit LED lighting on shop floors across its 477 UK stores. Other measures included switching in-store bin bags and the seemingly mundane reduction of napkin variety in staff restaurants.

Dalton Philips, Morrisons chief executive said: “We're pressing on with our strong momentum on indirect procurement implementing over 100 great cost saving ideas, many of which have been suggested by colleagues around the business.

“We'll continue to establish a clear and robust centralised procurement system across the business and we'll deliver our three-year commitment of £100m savings by the end of 2013.”

He added: ““Although the sustained pressure on consumer spending was reflected in our like-for- like sales performance, we have made further good progress against our strategic objectives – the building blocks which are the foundations of the future success of our business.”

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