The supermarket chain said pre-tax profits were down 7.2% to £879m from 2011 to 2012, while underlying profits before tax had fallen 4% to £901m.
Morrisons drop in profits which were the chains first for 6 years, comes as like-for-like sales fell 2.1% over the period however the company have announced a new strategy.
Morrisons Chief Executive, Dalton Philips said,
“The sustained pressure on consumer spending was reflected in our like-for-like sales performance, which was not as good as it should have been. We have implemented a range of measures to address this and are making good progress in improving our promotional effectiveness and in communicating our points of difference.”
Despite being one of the biggest supermarkets in the UK, they have failed to grow their business online despite the success seen by their competitors.
Morrisons who also own Kiddiecare.com have said they now plan to have their first online food sales by 2014, although there have been hints it could be sooner.
Mr Philips told the BBC,
“We will be transacting online with food by the end of this year,”
“We’ve been studying the market for two years [and] it’s a market that is accelerating very quickly.”
Morrisons decision to wait so long before having an online store has come as a surprise to many retail and online marketing experts who have seen the e-commerce boom first hand.
Access Web Solutions web designer Craig Carmichael, said,
“Despite the country possibly going into a triple dip recession, online sales have continued to rise which shows how strong the market now is.
“It’s not a surprise that a company which has not embraced the growing demand for online sales has reported a drop in profits.
“What is shocking is that a company as big as Morrisons have taken so long to react to the booming online market and it’s customers needs”
Despite the news that profits were down the share price for Morrisons was up 5% this morning while dividends were 10% higher for the year to 11.8p.