Morrisons’ sales fall – again
Total sales fell by 2% excluding fuel and 4.6% including fuel, while like-for-like sales including fuel were 5.1% down during the 13 weeks to November 1.
City analyst Shore Capital noted: “In addition to the deflation, Morrisons continues to trade against heavy promotional activity in financial year 2015, notably the pay-day vouchers.
‘Voucher activity’
“As part of the ongoing drive for simplification, voucher activity has been materially curtailed, as such management talks of a headwind from such activity of 2.4% through the third, which strengthened at the end of the quarter,” said analyst Clive Black and Darren Shirley.
The impact of the reduced voucher activity was likely to end by the start of financial year 2017, they added.
Morrisons claimed it was continuing to improve the shopping trip and serve customers better. Customer satisfaction scores were said to have shown a second year of significant improvement, as the store continued to invest in lower prices.
‘Customers are making improvements’
Chief executive David Potts said the business was moving at pace on a long journey. “Our priorities for the rest of the year are unchanged – to stabilise trading, reduce costs and further improve the capability of the leadership team. We are making good progress in many areas and customers are noticing improvements.”
The financial position of the group was strong and improving, he added. Net debt was £2.1bn at the end of the third quarter. Net debt at 2015/16 year-end was expected to be lower than the firm’s previous guidance of £1.9bn–£2.1bn.
After announcing the closure of 11 supermarkets and sale of 140 M local stores, the net growth of new sales space was predicted at about 0.5% for 2015/16. Depreciation was expected to be about £390M for the year.
Last week Morrisons opened up a new front in the supermarket price war by pledging to make sandwiches fresh every day in its stores. The move will put an end to “soggy supermarket sandwiches”, it claimed.
