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Supermarket chain in good shape

Morrisons enjoys best sales growth for seven years

MorrisonsMorrisons reported its strongest Christmas trading performance for seven years as figures for the sector show shoppers defying the squeeze on disposable income.

The supermarket chain said like-for-like sales in the nine weeks to 1 January, excluding fuel were up 2.9% (up 4.7% including fuel).

Total sales were also up (2% excluding fuel, or 4% including fuel), despite the continuing impact of store closures. LFL transaction growth was again strong, up 5.2% year-on-year during the period. 

Morrisons said service standards improved at the checkouts and on the shop floor, and achieved its biggest ever week for sales.

David Potts, chief executive, said: “This Christmas we made further improvements to the customer shopping trip. We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system. Both like-for-like and total sales grew, which was very encouraging. 

“Eighteen months ago I said that this would be a colleague-led turnaround, and our improving performance is entirely due to the continuing hard work of the Morrisons team of food makers and shopkeepers..” 

As previously guided, the company expects 2016/17 year-end net debt to be around £1.2bn and underlying profit before tax to be ahead of consensus, in the range £330m to £340m.

Morrisons figures follow a strong performance from Aldi and come in a busy week of trading updates for retailers. enjoyed a 15% rise in total sales in December compared to the previous year, with the German retailer reporting that its premium lines achieved above-forecast growth of 27%.

Majestic Wine said sales for the 10 week Christmas trading period ending 2 January 2017 increased by 15.3% against the same period in the prior year. On an underlying basis the increase was 12.4%. The group delivers c.30% of total annual sales during the Christmas trading period.

Majestic Retail had its biggest ever Christmas with like for like sales up 7.5%, on top of 7.3% like for like growth in Christmas last year. Approximately 0.5% of the growth was one-off due to transfer of sales from closed stores.

The British Retail Consortium (BRC) said sales across the industry soared 1.7% year-year-year in the week before Christmas.

Like-for-like sales – which exclude store openings – were up 1%.

BRC chief executive Helen Dickinson said: “Despite the slow start to the Christmas trading period, the week itself was a bumper one and exceeded expectations.”.

Food sales were particularly strong in December, but non-food sales were slow, possibly because of fewer clearance sales days after Christmas than in 2015.

However, over the three months to December food sales increased by 2.4%, the strongest increase in more than three years while non-food sales rose by only 1.3%, the weakest performance since October 2012.

A separate survey showed a slight slowdown in the number of permanent workers hired via recruitment agencies last month and pay rising at the slowest pace in five months.


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