Morrisons Q2 Trading Update

Morrisons has continued its improved performance, as it reported a 4.1% increase in group like-for-like sales in the second quarter.

The retailer said total sales excluding fuel were up 3.7% to £3.8bn for the 13 weeks to 28 April. It comes after a 4.6% increase in like-for-like sales in Q1, and Morrisons said underlying EBITDA for the first half of the year, excluding its fuel business, was up 16% to £321m.

During the latest trading period, Morrisons completed the £2.5bn sale of its petrol forecourt business to fellow CD&R-owned Motor Fuel Group. It also reduced debt by 35% to £4bn, down from a peak of around £6.2bn.

In May Morrisons bought 38 convenience stores in the Channel Islands from SandpiperCI, and it has also completed its conversion programme of McColl’s branded stores to Morrisons Daily. It has set a target of hitting 2,000 Morrisons Daily stores across the UK in 2025.

“I am pleased with the overall performance of the business in the second quarter with supermarkets, convenience, wholesale and online all delivering growth and contributing to a 4.1% increase in like-for-like sales,” said Morrisons CEO Rami Baitiéh.

“Over the last eight months we have listened carefully to over 340,000 customers, colleagues and suppliers, and the insights from this exercise are helping to refine and shape the activity in all three pillars of our strategy: commercial excellence, operations optimisation, and new value creation. It’s clear that availability and our loyalty scheme are the two areas our customers talk about the most and so we are focusing intensively on these areas.

“Our Aldi and Lidl Price Match, introduced in February, has had a great start and is giving customers increasing confidence in the competitiveness of our prices across the shop.

“Customer reaction to the significant investments we have made in the More Card has been very positive. We now have over five million active customers, and transactions using the card have grown by around 35% in the last eight months. We are now targeting 70% of transactions to be through the More Card over the medium term.”

GlobalData senior retail analyst Eleanor Simpson-Gould said: “With Tesco reporting UK like-for-like sales of +4.6% for the 13 weeks ending 25 May 2024, a result not too dissimilar from its own, Morrisons will undoubtedly see this as a win after several years of market share erosion amid competition from the discounters.

“It is not out of the woods yet, as it will face stronger comparatives in the latter half of this financial year.”