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The chief executive of Morrisons has attributed a deceleration in Christmas period sales to a cyber attack that impacted product availability and necessitated price reductions on various items. Rami Baitiéh, who leads Britain’s fifth-largest supermarket chain, described the November ransomware attack on Blue Yonder, their supply chain management software provider, as a temporary setback in the company’s recovery strategy.
Despite these challenges, the retailer reported positive annual figures, with group like-for-like sales increasing by 4.1%, marking eight consecutive quarters of growth. Underlying earnings demonstrated an 11.2% rise to £835 million, while fourth-quarter like-for-like sales, excluding fuel and VAT, grew by 4.9%.
The Bradford-based organisation has faced significant hurdles since its £7 billion acquisition by American private equity group Clayton Dubilier & Rice in 2021, which added £6.6 billion of debt to its balance sheet. The supermarket chain’s market position had previously weakened as shoppers gravitated towards discount competitors, with Aldi surpassing it as Britain’s fourth-largest grocer.
Under Baitiéh’s leadership, Morrisons has implemented strategic changes, including enhanced price competitiveness, improved product availability, and a revamped loyalty programme. These initiatives have shown promising results, with customer complaints dropping substantially from 22,000 to 5,200 per week since his appointment.
The company’s debt reduction efforts have proven successful through various asset sales, including the £2.5 billion disposal of its petrol forecourts business to Motor Fuel Group. Chief Financial Officer Joanna Goff confirmed that company debt has decreased by 40% from its peak, falling from £5.5 billion to £3 billion, with interest payments expected to reduce from £400 million to approximately £250 million this year.
Looking ahead, Morrisons faces additional challenges with £75 million in extra costs due to national insurance contributions changes announced in Rachel Reeves’s recent budget. The supermarket chain maintains its commitment to its distinctive Market Street counters and price-matching strategy against discount rivals, despite mounting cost pressures.
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