Wm Morrison sees better trading under new CEO's strategy

Wm Morrison reported an improvement in sales in the last three months after new chief executive David Potts introduced sweeping changes in stores.

Sales from stores open at least a year fell 2.9 per cent, excluding fuel, in the three months to May 3.

This is broadly in line with the 2.6 per cent decline in the previous quarter, and just ahead of analysts' expectations of a 3-3.5 per cent decline.

However, it is a significant improvement on the year earlier period, when like-for-like sales fell 7.1 per cent.

The better trading follows upbeat data from Kantar Worldpanel, the consumer research group, which showed that Morrison was the best performing of the big four supermarkets in the four weeks to April 26. It was the only one of the big four to register positive sales growth, indicating that some measures put in place by Mr Potts were paying off.

Mr Potts said: "My initial impressions from my first seven weeks are of a business eager to listen to customers and improve. This is a business with many attributes, some unique. Our task is to use those advantages to improve the shopping trip for customers and create value."

Morrison also said it expected underlying pre-tax profit to be higher in the second half than the first. However, it would incur one-off restructuring costs of £30m-£40m, from cutting 700 jobs at Morrison's head office in Bradford.

It also said that net debt had fallen by £150m to £2.2bn since the end of its financial year in January.

Morrison also announced the appointment of former Tesco and Asda executive Darren Blackhurst as group commercial director.

Morrison has endured a torrid time over the past few years, ousting former chief executive Dalton Philips in January, after sales continued to decline despite hundreds of millions of pounds of price cuts, and appointing Mr Potts a month later.

Since his appointment, the former Tesco executive has set about making sweeping changes, including parting company with five senior managers, cutting the head office jobs, ordering stores to be cleaned and dispensing with an unpopular automated queue management system

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