Morrisons has halted declining sales in its first quarter, with CEO David Potts declaring that “momentum in the business is now building”.
Total revenues increased 3.4% to £4.7bn in the 13 weeks ended 29 January at the private equity-owned supermarket chain.
Group like-for-like sales, excluding fuel and VAT, nudged up 0.1%, reflecting steadily improving trading over the past three quarters, which had all registered a decline.
Potts said there was still plenty of work to do, but he added “momentum in the business is now building with an improving trajectory over the last three quarters and like-for-like sales now in positive territory”.
“Our market share has stabilised, our inflation rate is below our peers, and Morrisons’ traditional competitiveness, colour and dynamism is steadily returning to every part of the business.”
It follows the latest data from Kantar showing Morrisons sales turned positive in the 12 weeks to 19 March 2023, rising 0.1%. However, it has seen market share eroded by discounters Aldi and Lidl, with Morrisons now holding a 8.8% share, compared with 9.5% a year ago.
Morrisons recently announced a new price-cutting programme to attract cash-strapped customers during the cost of living crisis.
The Yorkshire-headquartered group, which is owned by Clayton Dubilier & Rice (CD&R), also targeted £700m in cost savings over the next three years to help it lower prices further, boost service levels, invest in its loyalty programme and expand the convenience store footprint.
“Although this has been another difficult period for consumers with inflation still at very high levels, we have continued with our programme of regular and meaningful price investments, enabled by a strong start to our cost savings programme,” Potts said.
“The cornerstone of the improving picture at Morrisons has been our colleagues. Across the whole business, they have continued to help our customers by providing a colourful, vibrant, fresh food-focused shopping experience and I want to thank everyone at Morrisons for their continued hard work and positivity.”
Morrisons reached the milestone of 500 Daily c-stores this week with the opening of a site in Salford. There are now 350 former McColl’s stores trading as Morrisons Daily and around 10 new conversions every week.
“This is an important milestone for us and cements a leading position in the UK’s growing convenience market,” said Potts. “Whether it’s a franchise store or a former McColl’s store, customers are responding really well to the carefully tailored Morrisons Daily fresh food convenience offer, and clearly appreciate our great value and our bright, modern store designs.
“With every new Morrisons Daily conversion, we see an immediate and substantial uplift in like-for-like sales, often of more than 20%.
“We expect to reach 750 Morrisons Daily stores in the autumn and the 1,000-store mark early next year.”
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