Morrisons Feeling the Pain
We have been warning for quite a while now that some of the major retailers in the UK are going to have to make some economies of scale in an attempt to stop the competition they face form many of the low price budget supermarket chains, and it would appear that is something that Morrisons have finally decided they need to do.
It has just been announced that Morrisons is to close 11 of their supermarkets in the UK due to a huge slump in profits which has seen those profits being the lowest ones achieved in the last nine years of trading.
Being the UK’s fourth largest supermarket chain does of course mean Morrisons have a large number of retail outlets spread across Great Britain and they have chosen to close 11 of their loss or low profit making supermarkets and have chosen to sell all 140 of their small convenience type stores too.
The loss and low profit making stores which will close will see up to 900 jobs also being lost unless Morrisons can find those employees jobs in some of their other stores, however that is looking unlikely as they are looking at ways of making savings in those other stores too.
With the news that profits were down shares in Morrisons immediately fell 5p and were trading at 170.9p yesterday and the markets reacted swiftly on the news that the pre tax profits achieved in the half year to August the 2nd this year were down from £239million to just £126million Turnover was also dramatically affected which having been £8.4billion last year over the same time period and being just £8billion for the same period this year.
There are going to be some more changes at Morrisons in the coming weeks and months as they are also looking at making potential changes to their recently launched loyalty scheme, and hoping that their online ordering and delivery service which has been beset which problems finally begins to bear fruit.
If you are thinking of placing any type of Binary Options trading in the retail market sector and basing those trades on supermarkets then be aware there is some major competition and fierce between the long established supermarket chains and the low cost budget supermarkets.
It is expected that some of those larger companies are going to be issuing and reporting similar downturns like Tesco in their income and profits soon.
