Like-for-like (LFL) sales fell by 2.7%, excluding fuel and VAT, in the six months to August 2 and were 2.4% down in the second quarter.
Total turnover dropped by 5.1% to £8.1bn, while underlying profit before tax was down by 35% to £117M.
The retailer also revealed plans to close 11 stores, putting at risk the future of 900 jobs.
Potts regretted the “difficult decision” to propose 11 unnamed store closures but said their lack of viability justified the decision.
In-house food manufacturing
Meanwhile, Potts reaffirmed his faith in the retailer’s commitment to in-house food manufacturing, saying it offered an essential service to customers.
“Half of the food we sell is fresh and half of that food is manufactured by ourselves,” Potts told BBC Radio 4’s Today programme. “Whether it is in the manufacturing businesses we wholly own, or in our own stores – we make our bread from scratch and our British burgers from scratch in store.”
Potts said food manufacture was a key point of difference between Morrisons and the other big four supermarkets – Tesco, Sainsbury and Asda – and the limited range discount stores Aldi and Lidl.
“Our staff really do bring these features to life,” he continued. “Our customers do talk about that.”
‘Turnaround will take time’
In the commentary accompanying the results, Potts claimed customers and colleagues were beginning to notice improvements, “but the turnaround will take time and require sustained investment in the proposition”, he added.
Turning to Morrisons' £25M cash sale of its 140 M local convenience stores announced on Wednesday (September 9), Potts admitted that the retailer had arrived in that part of the convenience channel “quite late”. He said: “Despite the best efforts of the company, we were unable to scale the business at this time.”
Meanwhile, read analysts' reaction to the results here.
Morrisons’ first-half results at a glance
- 47% drop in half yearly profits before tax to £126M
- Like-for-like (LFL) sales down 2.7% in the first half
- LFL sales fell 2.4% in second quarter
- Total turnover fell by 5.1% to £8.1bn