Morrisons’ food makers praised as festive sales rise

By Matt Atherton

- Last updated on GMT

Morrisons' boss praises food makers after the retailer reports its best sales performance for seven years
Morrisons' boss praises food makers after the retailer reports its best sales performance for seven years

Related tags Better Retailing

Morrisons’ chief executive David Potts praised the retailer’s “food makers and shopkeepers”, after it reported its strongest sales performance for seven years in a Christmas trading update.

The retailer’s like-for-like sales were up 2.9% in the nine weeks to January 1, compared with the same period in 2015. Total sales were up 2%, and like-for-like transaction revenue growth was up 5.2%. But, items per basket was down 5.3%.

The “encouraging”​ sales were driven by an improved shopper experience, as well as hard work from Morrisons’ food makers and staff, Potts claimed. Fresh categories and beverage sales also contributed to the sales growth.

‘Morrisons’ food makers’

Morrisons’ Christmas trading update – at a glance

  • Like-for-like sales up 2.9%
  • Total sales up 2%
  • Items per basket down 5.3%

“This Christmas we made further improvements to the customer shopping trip,”​ Potts said. “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.”

Sales were boosted by the retailer’s fresh produce, and its beers, wines and spirits categories.

The firm’s new Best range proved very popular, Morrisons said, as more than half of customers’ baskets contained at least one Best product. The retailer also benefitted from the range’s 100 new Christmas products.

End of year target increased

Morrisons’ end of year target was increased following the latest financial report, to between £330M and £340M – up from £326M.

Morrisons’ results follow grocery think-tank IGD chief executive Joanne Denney-Finch's comments last year that retailers would benefit​ from making a shopping trip “an experience”​.

Morrisons revealed in November that it was reviving the Safeway brand​ for a range of grocery products for wholesale to independent retailers.

Meanwhile, Tesco is to close two of its distribution centres​, with a net loss of 500 jobs, the supermarket revealed this week (January 10). The move was designed to simplify its supply chain operations and management structure.

What the analysts say about Morrisons

  • Verdict Retail analyst Tom Berry said: “Setting the bar high for the big four grocers, Morrisons’ Christmas trading figures highlight the success of its continued drive to improve quality and affordability, resulting in record trading figures to complete a year in which CEO David Potts has transformed the outlook of the once beleaguered retailer.”
  • representative Martin Lane said: “Morrisons have truly rediscovered what Christmas consumers want – posh nosh at bargain prices. By increasing their line of luxury goods, the retailer was rewarded with trolleys through the doors and the sound of tills ringing throughout the festive season.”

Related topics Drinks Fresh produce

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