Second consecutive quarter of sales growth for supermarket group Morrisons

Morrisons saw like-for-like supermarket sales grow by 0.7% during the first quarter of this year.

Morrisons saw like-for-like supermarket sales grow by 0.7% during the first quarter of this year. Photo: Sean Dempsey/PA - Credit: PA

Supermarket chain Morrisons today reported a 0.7% increase in like-for-like sales during the first quarter of this year as its turnaround under chief exectuvie David Potts continued.

The figure represents a second consecutive quarter of growth for the UK’s fourth-largest grocer following four years of decline or stagnation.

Morrisons said transactions grew by 3.1% on a like-for-like basis during the first quarter, with volume also again showing strong life-for-like growth, although prices fell by 2.6% as it “continued to invest in becoming more competitive”.

It said sales at its Food To Go division grew by more than 17% year-on-year while sales within its Free From range jumped by 70%.

Mr Potts said: “We are encouraged by progress across our six priorities. There is still much to do and our colleagues are working very hard to improve the shopping trip and save customers every penny we can.

“Customers are responding and satisfaction levels remain ahead of last year. We are, of course, pleased with a second consecutive quarter of positive LFL sales, which demonstrates our aim to stabilise trade is taking effect.”

Including fuel, total like-for-like sales were 1.2% higher in the first quarter compared with a year earlier, against a 0.2% year-on-year decline in the final quarter of 2015, when a fall in the value of crude oil drove pump prices down.

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The Bradford-based group’s resurgence comes after Mr Potts took the helm last year, following the removal of former boss Dalston Philips, and embarked on a number of changes in a bid to turn around the firm’s fortunes.

Clive Black, analyst at Shore Capital, said: “In a patient and methodical manner, Mr Potts has worked his way through a long ‘to do’ list. Store standards have been improved, product on offer has been enhanced, merchandising has been developed and customer service is better.

“Those price cuts alongside the broader instore package are helping Morrisons to compete more effectively.”

In March, Morrisons signed a landmark deal with US online giant Amazon to supply fresh food to its customers.