Published by Global Banking and Finance Review
Posted on January 29, 2025
By James Davey
LONDON (Reuters) -British supermarket group Morrisons said a November cyber attack at technology provider Blue Yonder hit its product availability, impacting sales in the Christmas quarter.
CEO Rami Baitieh said the attack meant Morrisons had to shut down its warehouse management system, leaving it without visibility on its fresh and produce stock levels for several days.
"We had a workaround in place very quickly but our availability fell significantly and very sadly we let down some customers," he told reporters.
While availability had since improved "it is not yet back to pre-incident best level".
Finance chief Jo Goff said Morrisons did see sales growth in its quarter to the end of January, the first quarter of its 2024/25 fiscal year, but it was lower than like-for-like growth of 4.9% reported on Wednesday for the previous three months.
She said insurance would cover the cost of the incident.
Morrisons, the UK's fifth largest grocer, said its fourth quarter 2023/24 performance was its strongest in four years, reflecting a strategy to improve price competitiveness and its loyalty programme and more effective promotions. A scheme to price match discounters Aldi and Lidl on key items was introduced in February.
Industry data, published this month, showed Morrisons, owned by U.S. private equity firm Clayton, Dubilier & Rice since 2021, underperforming the sales growth of market leader Tesco and No. 2 Sainsbury's, as well as Aldi and Lidl in the holiday period.
The data from researcher Kantar showed Morrisons' sales up 0.4% in the 12 weeks to Dec. 29, ending 2024 with a UK grocery market share of 8.6%, down 20 basis points on the year.
Analysts said that since CD&R bought the company Morrisons has been hamstrung by debt. Net debt was now 3.1 billion pounds ($3.9 billion), down from 5.5 billion pounds a year ago.
Morrisons said core earnings, or underlying earnings before interest, tax, depreciation and amortisation (EBITDA), its preferred metric, rose 11.2% to 835 million pounds in the year to Oct. 27. Revenue was 15.3 billion pounds, up 3.8%.
Goff said that at the pre-tax level losses halved from just over 1 billion pounds in 2022/23. Interest costs were just under 400 million pounds.
($1 = 0.8059 pounds)
(Reporting by James Davey; Editing by Paul Sandle and Jane Merriman, Kirsten Donovan)
