Morrisons savours ‘improving performance’ after festive season sales boost
- Credit: PA
Supermarket Morrisons enjoyed its best performance for seven years over the crucial festive period as it posted a 2.9% surge in like-for-like sales.
The chain upped its full-year profit outlook after the better-than-expected sales hike for the nine weeks to January 1, pencilling in underlying pre-tax profits of between £330m to £340m.
David Potts, chief executive of Morrisons, said: “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.”
Its expected underlying profits for the year to the end of January would mark a significant rise on the £242m posted a year earlier.
Morrisons, which has been seeing a steady recovery in sales thanks to an overhaul being led by Mr Potts, said its online arm contributed 0.6% to the like-for-like sales hike over the nine-week period.
Mr Potts said customers “splashed out” over Christmas, with strong demand for its new premium Best range as they traded up for their festive food.
The group saw ongoing falls in food prices during the season as the sector continues to wage a fierce price war, although the pace of declines slowed to 0.2% year-on-year and was flat on the previous three months.
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Morrisons said any price pressure was also offset by a 5.2% leap in the number of sales through its tills.
Mr Potts said, while the group remained “firmly in fix mode”, he was “delighted to have found our form”.
“Our customers are responding as we turn this great British business around,” he added.
Shares jumped more than 4% higher after the festive update.
Morrisons is the first of the Big Four supermarkets to report for the key trading period, setting the scene for what is expected to have been a impressive Christmas for the entire sector.
Sainsbury’s follows with its figures on Wednesday, with Tesco reporting on Thursday.
Industry data out separately showed supermarkets had their best Christmas for four years, with Nielsen reporting a 3.3% surge in sales across the sector over the four weeks to December 31.
Retail analysts at Bernstein said it was a “great Christmas” for the sector.
They added: “This is a very strong result for Morrisons and is the second year in a row of positive like-for-like sales at Christmas, now building growth on growth.”
The chain’s sales rise marks a significant improvement on the 0.2% increase seen the previous Christmas period, while it also comes as a step up on the 1.6% hike reported in its third quarter.
Mr Potts, who took the helm last year following the removal of former boss Dalton Philips, said: “This Christmas we made further improvements to the customer shopping trip.
“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.”
Morrisons recently launched an automated ordering system, using sales data to predict stock needs in store across grocery and fresh product ranges.