Morrisons has reported “strong momentum” in its turnaround, despite customers feeling the impact of food inflation.
Releasing its third quarter figures today, for the 13 weeks ending 27 July, the supermarket reported like-for-like sales up 3%, with total sales up 3.5% to £4bn.
The retailer said the period had seen double-digit like-for-like growth in online sales, with Morrisons the fastest growing online grocery business in the period.
Chief executive Rami Baitiéh said it was helping shoppers fight food inflation, having last week cut the prices on 650 everyday items as it helped kickstart competition on prices in the run-up to Christmas.
This week The Grocer revealed Morrisons was also launching its biggest fresh range reset for a decade with 500 new products, including a new “ultra-premium tier” The Best Signature Collection range.
Baitiéh also said Morrisons was on course to achieve its target of £1bn savings by the end of the financial year.
However, yesterday the retailer came under fire from shopworkers’ union Usdaw amid claims it is lagging behind the rest of the supermarket sector on pay.
Usdaw claimed Morrisons had made its staff “minimum wage workers”, but Morrisons defended its record, saying it had invested more than £100m in increasing workers’ pay in the past year.
Baitiéh said: “Against a background of rising inflation and challenging macroeconomic conditions, like-for-like sales grew by 3.0% in our third quarter, making it our 11th consecutive quarter of like-for-like sales growth.
“Our market share was stable, as it has been since the start of the year.
He added: “Consumers are feeling the squeeze and we are continuing to work hard to help our customers make the most of stretched household budgets, staying true to Morrisons values of providing good affordable fresh food for all.
“As we do this, we are also managing the incremental impact of the autumn budget and other government legislation, which has created significant cost headwinds, some of which were unexpected at the start of the financial year.
“In Q4 inflation has increased further and we are adapting and adjusting to make sure we continue to offer the best value – cutting prices for all customers, tailoring promotions and offering More Card customers even better rewards for their loyalty.
“In this challenging environment, I want to pay particular tribute to our colleagues and thank them all for their continued commitment and hard work.”
Chief financial officer Jo Goff added: “We delivered a resilient performance in Q3 in tough market conditions and with significant external cost headwinds. We also made further progress with our capital structure, completing a material refinancing which further reduced gross debt, and proactively extended maturities to 2031.
”We have now repaid a total of £2.7bn of debt since the acquisition of the business by CD&R, bringing the current debt figure down by around 43% from £6.2bn to £3.5bn.
“As we continue to face into significant cost headwinds we are also making good progress with our cost reduction programme and remain confident of reaching our recently increased target of £1bn in total cost savings by the end of FY26.”
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