Morrisons announces sales growth
Like-for-like sales were up 1.6% excluding fuel – a rise of 3.4% with fuel included. But total sales excluding fuel fell by 1.2%. Sales including fuel were up by 1.1%.
Morrisons attributed the fall in total sales to the impact of supermarket closures and its exit from convenience store chain M Local.
Supermarket closures
Morrisons chief executive David Potts said the company’s like-for-like sales had now been positive for a year and thanked the hard work of his team.
“There is a lot more we plan to do,” said Potts. “We will keep investing in becoming more competitive and improving the shopping trip.
“I am confident we will serve our customers even better during the important trading period ahead.”
Morrisons said its like-for-like transaction numbers were up 4.1% in the quarter, while investment in prices saw deflation of 1% in the period.
Buying fewer items
The number of items in consumers’ baskets had fallen year-on-year by 5.5% – a continued trend of consumers buying fewer items in their weekly shops.
Morrisons also reported strong Halloween sales in the third quarter of this year, boasting sales growth of 20% year-on-year.
The company reported it was in a strong financial position, while its net debt target remained unchanged from the last quarter at £1.2bn by the end of the year.
Morrisons shares were up 1.6% to 224.8p this morning (November 3) on the news.
What the analysts say
Shore Capital analysts Darren Shirley and Clive Black believed it was still early days in the Morrisons recovery story and noted the group has yet to annualise its improved sales momentum and delivered growth on growth.
“That said, we have growing confidence in the CEO David Potts turnaround strategy with the group engaging in a further round of ‘Price Crunch’ in the period, the promotional strategy becoming increasingly clear and well-articulated within store and management’s growing self-confidence around ‘events’,” said Shirley.
Tom Berry, Analyst at Verdict Retail said: “After too many years of rushed, poorly executed decisions, Morrisons is now building on a string of well-chosen initiatives based around its Fix, Rebuild and Grow strategy.
