Morrisons’ sales up, as boss bids for ‘broader and stronger’ firm
The Bradford-based retailer reported like-for-like sales, excluding fuel, up by 2.5% in the 13 weeks to October 29. Contributions from the firm’s Retail division rose by 2.1%, while Wholesale rose by 0.4%.
The retailer said it had worked hard during the quarter to limit the impact of lower sterling on imported food prices, and had made good progress on becoming more competitive.
Morrisons’ chief executive Potts added: “We are pleased with a further step up in our competitiveness and another period of positive like for like sales growth. I am confident our plans to keep serving customers better will enable us to continue the strong momentum of the year so far, into the important fourth quarter.
‘A new Morrisons is taking shape’
“As we work towards becoming a broader, stronger business, a new Morrisons is taking shape, built by our colleagues on firm balance sheet foundations.”
The retailer has long focused on developing its vertically integrated supply chain, with Potts regularly praising the organisation’s “food makers”.
In its latest trading statement, the supermarket said its new automated ordering system was now fully operational in all stores and across all food categories. “We expect it to continue to improve availability and save time for colleagues in the important period ahead over Christmas and New Year,” said the firm.
Meanwhile, Morrisons’ latest results were broadly welcomed by financial commentators.
Shore Capital analysts Clive Black and Darren Shirley said the results revealed “good solid trading”.
Its eighth consecutive quarter of like-for-like sales growth was “a commendable achievement from management and operatives alike,” said Black and Shirley.
Fiona Cincotta, senior market analyst at www.cityindex.co.uk, noted that the rate of like-for-like sales growth was slowing.
“On balance, these are a solid set of numbers that show the company’s recovery remains on track,” said Cincotta. “But the true test will come in the current quarter, when we'll find out if new customers attracted to revamped price and product offerings will stick around for Christmas.”
Meanwhile, read more analysts’ comments in the box below.
Morrisons’ results: what the analysts say
Clive Black and Darren Shirley, Shore Capital
“Morrison has reported what we see as good solid trading for the 13-weeks to October 29 2017 with like-for-like sales (LFL), excluding VAT and fuel, up by 2.5% comprising positive overall LFL volumes.
“Following this market update we are retaining our financial year 2018 financial estimates ahead of the fourth quarter peak trading period. In a clearly competitive UK grocery market characterised by positive mix and modest inflation, albeit flatter volumes, we see Morrison now delivering sustained year-on-year growth-on-growth as a real achievement of ceo David Potts and his team.”
Fiona Cincotta, senior market analyst, www.cityindex.co.uk
“It's hard to tell whether Morrisons’ shopping cart is half full or half empty from these numbers.
“Bears will note that the rate of like-for-like sales growth is still slowing. But, at 2.5%, it’s only slightly down on the 2.6% recorded in the second quarter and above figures recently quoted by Tesco and Sainsburys. Bulls would have been hoping for something closer to the 3% growth rate notched up in the first quarter.
“On balance, these are a solid set of numbers that show the company’s recovery remains on track. But the true test will come in the current quarter, when we'll find out if new customers attracted to revamped price and product offerings will stick around for Christmas.”
