Wm Morrison, Britain’s fourth-biggest supermarket chain, promised today to open more small stores as it confirmed that its new chief executive, Dalton Philips, would take up his role on March 29.

Mr Philips, who was poached from the Canadian retailer Loblaw, succeeds Marc Bolland, who quit in November to take over from Sir Stuart Rose at Marks & Spencer.

The news came as Morrisons, which has opened 45 stores during the past year, reported a 30 per cent rise in full year pre-tax profits to £858 million as turnover rose by 6 per cent to £15.4 billion.

On an underlying basis, stripping out the impact of property disposals and a one-off credit of £91 million to the company pension scheme, pre-tax profits rose by 21 per cent to £767 million.

This was better than the consensus forecast of £757 million predicted by a range of City analysts.

Sir Ian Gibson, the non-executive chairman of Morrison, said that the company had raised its market share during the year, with both more customers visiting its stores and existing customers spending more.

He said that, on average, 10.5 million customers were visiting a Morrisons store each week.

He said: “There is now much greater awareness of our brand throughout the country and as a result we grew sales well in all regions, particularly in the South and Scotland.

“Our market research showed that we continued to attract new customers from competitors, including both the premium grocery segment and the discounters.”

Sir Ian said that the positive response from customers to new store openings had encouraged the company to look at trading from smaller stores in future.

He said that 34 of the 45 stores opened during the year were acquired from the Co-op, after the latter’s takeover of its rival, Somerfield.

He added: “Although it is early days, we are pleased with the customer response to the new stores, many of which were community stores operating with a limited range and high prices under the Somerfield fascia.

“As Morrisons, these stores now offer a full weekly shop, with a strong fresh offer, at the normal nationwide prices charged throughout our estate.

“Whilst these stores are smaller than our average, we are confident that we can operate this size of store very successfully.

“There are now 96 such stores in our estate, and we expect that smaller-store formats will form an important element of our ongoing new space acquisition strategy.”

However, Sir Ian warned that the company was braced for another tough year of trading, with customers continuing to be under financial pressure.

He added: “We expect the economic environment to remain challenging, disposable incomes to be under pressure and value to remain a high priority for consumers.”

Source : The Times

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