Morrisons reported that it beat forecasts for underlying sales growth at Christmas, buoyed by strong sales of premium lines and shoppers responding to improvements made in its stores.
For the 10 weeks to Jan. 7, group like-for-like sales were up 2.8%, comprising contributions of 2.1% from its retail operation and 0.7% from wholesale. This was ahead of analysts’ average forecast of 1.7% growth and better than the 2.5% rise reported in its third quarter.
Performance improved further in the final weeks of Christmas and over the New Year with like-for-like sales in the six weeks to Jan. 7 up 3.7% (+2.8 retail, +0.9% wholesale).
In addition to food inflation, Morrisons said customer numbers were increasing, with LFL transactions up 2.3% year-on-year. It said the increase was partly due customer service improvements such as more tills being open and better stock availability.
The chain’s expanded “Best” premium range also proved popular with sales up 25%. It added that customers have responded positively to its new Home & Leisure range that was recently rolled out across its stores.
Morrisons said that despite input cost pressures on many commodities, the price of a basket of key Christmas items was the same as last year. LFL volumes were said to have been “positive”. Morrisons online grocery business also performed well, with sales up 10%.
Growth in the group’s fledgling wholesale business continued to accelerate. This was helped during the period by supplying some tobacco products to McColl’s earlier than initially planned because of the collapse of Palmer and Harvey.
Following trials at the end of last year, Morrisons supply deal with 1,650 McColl’s stores officially begins this month. The group will be begin supplying the convenience chain with its new Safeway range and branded items via a rolling programme of around 25 additional stores each week.
CEO David Potts said: “More and more customers found more things they wanted to buy at competitive prices at Morrisons this Christmas. Our plans to become a broader and stronger business are progressing well, with another period of positive like-for-like sales and the start of the rolling programme to supply McColl’s.”