David Potts, CEO of Morrisons
The Bradford-headquartered supermarket chain has reported better-than-expected results for the festive period.
Morrisons saw like-for-like sales excluding fuel rise by 2.8% for the 10 weeks ending 7 January, boosted by the introduction of its new ‘Best’ premium range.
The group also reported strong results for its newly introduced wholesale division which saw like-for-like sales rise by 0.7%.
A deal to supply the McColl’s convenience chain has helped to boost wholesale growth, and Morrison will be reviving the Safeway brand in these convenience shops this month.
Sales were especially strong over Christmas and New Year, with group like-for-like sales of 3.7% for the six weeks to 7 January, comprising retail of 2.8% and wholesale of 0.9%.
Also attributing to the company’s success was the introduction of automated ordering across all of its UK stores, helping improve availability and stock levels throughout the holidays.
This also led to a rise in customer satisfaction with the chain having more tills open, shorter queues and customers noticing the ‘friendliness of staff even at the busiest times’.
David Potts, chief executive, said: "More and more customers found more things they wanted to buy at competitive prices at Morrisons this Christmas.
“The hard work and friendliness of our colleagues continues to be key in delivering our strengthening performance, and I would like to thank them for everything they do for our customers.”
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: "Morrison maintained its sales momentum towards the end of last year, and witnessed some particularly brisk trading around the Christmas period, though this isn’t enough to move the dial on the company’s profit forecasts.
"The supermarket says it has become more competitive, which in an environment of inflationary pressure means it has likely taken some hit on margins, or passed some pain further up the supply chain, or both. This strategy appears to have borne fruit in the form of volume growth however.
"Morrison’s wholesale activities are also becoming more significant with a deal to supply the McColl’s convenience store chain, which will see the renaissance of the Safeway brand later this month. Morrison also has a tie-up with Amazon as part of the US tech giant’s foray into online grocery delivery in the UK, so the supermarket has irons in a few fires.
"Food sales are not as vulnerable to a consumer slowdown as clothing, but given the weak trading backdrop, Morrison’s Christmas trading figures are worthy of a cursory round of applause."
Shares rose 5% on the news.
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