Morrisons' Sales Growth Slows After Cyber Attack Disruption
LONDON (Reuters) -British supermarket group Morrisons' sales growth slowed in its first quarter, reflecting a previously flagged cyber attack at its technology provider which disrupted its operations.
The UK's fifth largest grocer, which has been owned by U.S. private equity firm Clayton, Dubilier & Rice since 2021, said on Wednesday its like-for-like sales rose 2.1% in its quarter to January 26, having been up 4.9% in the previous quarter.
"As I outlined in January, the cyber attack on Blue Yonder caused a far reaching period of disruption across the businesses, affecting our stock accuracy, availability, waste and forecasting," CEO Rami Baitiéh said.
Total sales rose 2.4% to 4.0 billion pounds ($5.2 billion).
Morrisons' update was published two weeks after Asda, Britain's third largest grocer, said it planned a campaign of price cuts and would take a profit hit to reset its business, sending shares in industry leader Tesco and number two player Sainsbury's tumbling.
Industry data, published this month, showed Morrisons continuing to underperform the sales growth of Tesco and Sainsbury's, as well as discounters Aldi and Lidl, over the 12 weeks to February 23, with its UK grocery market share down 2 basis points over the year at 8.6%.
On Monday, Morrisons said 365 employees faced redundancy as part of a reduction of store operations aimed at offsetting significant cost increases, including higher employer social security payments imposed by the UK government.
Morrisons said on Wednesday it delivered a further 56 million pounds of savings in its first quarter.
It raised its target for cost savings to 1 billion pounds, from 700 million previously, "which will help us offset cost headwinds, invest for customers and remain competitive in a fast changing market."
($1 = 0.7751 pounds)
(Reporting by James Davey, Editing by Paul Sandle)
