Price cuts help push Morrisons sales up 3.4%
4 May 2017
Morrisons has reported better than expected sales growth in the first quarter after reaping the rewards of price cuts and strong Easter trading.
The supermarket said like-for-like sales grew 3.4% in the three months to April 30, ahead of analyst expectations and an acceleration on the previous quarter's 2.9%.
Chief executive David Potts said: "We are improving the shopping trip in many different ways, which is making Morrisons more popular and accessible for customers.
"These new initiatives in-store, online, in wholesale and services are beginning to build a broader, stronger Morrisons."
The company said its Price Crunch initiative has seen more customers come through its doors, with sales over Valentine's Day, Mother's Day and Easter particularly strong.
Mr Potts said the group is "working hard" to remain competitive, despite an increase in the price of food imports linked to the collapse in the Brexit-hit pound.
Morrisons said its deal to sell groceries through Amazon "continues to grow", with the same-day and one-hour delivery service recently extended into more London postcodes.
Mr Potts added: “We’ve been working hard to improve quality and lower prices. We’re a bit more relevant to a few more people.”
He has ploughed investment into price cuts and called time on under-performing stores in his attempts to turn the page on the supermarket’s ill-fated era under ousted boss Dalton Philips.
His efforts come as the grocery sector’s so-called Big Four – Tesco, Asda, Sainsbury’s and Morrisons – remain locked in a bitter price war sparked by German discounters Aldi and Lidl and face further challenges from an expected slowdown in consumer spending.
Figures from Kantar on Wednesday showed that Morrisons was the fastest growing Big Four grocer, helped by its The Best line attracting more affluent shoppers, with sales up 2.2%, although its market share fell 0.2 percentage points to 10.4%.
George Salmon, equity analyst at Hargreaves Lansdown, said: “There is a long road ahead of the UK’s supermarkets, but, of the three major players, Morrisons seems to be in the highest gear. Customers are flocking back, and like-for-like sales growth is trending strongly upwards.
“The transformation, spearheaded by CEO David Potts, is by no means complete; after all the weaknesses in online and convenience are still glaringly obvious. Nonetheless, progress thus far has been impressive.”
Chris Radburn/PA Wire