Morrisons surprised us all this morning with much better than expected Christmas trading figures.
A year ago, the beleaguered retailer’s poor festive performance proved the death knell for former CEO Dalton Philips’ time in charge. Today’s 0.2% rise in like-for-like sales may not sound like a lot, but it is the first positive trading recorded by Morrisons for four years.
Morrisons put the growth down to a greater focus on everyday value, running fewer multi-save promotions and providing bigger packs with better value. It also said it saw strong like-for-likes in premium products and a successful reset of its beers, wines and spirits category.
There was also evidence to suggest that the work CEO David Potts has been leading to improve the shopping experience is starting to pay off. He said today that customer satisfaction levels were significantly higher than a year ago and that like-for-like transactions were up 1.3% in its core supermarkets.
With all this in mind, you might have expected Potts to be cock-a-hoop. However there was also news today that Morrisons is to close a further seven supermarkets – affecting 680 staff. The move is further evidence, if any were needed, that the current grocery market is still a brutally competitive one.
Potts is all too aware of this, but behind the caveats this morning he was clearly enjoying the upturn in fortune and exuded a quiet confidence in the job that he and his team are doing.
“We are on a long journey and to lead a revival of this great company, we will make progress by being more competitive and serving our customers better, but the trading journey is unlikely to be in a straight line.”
News this week that Asda is ready to invest a further £500m in pricing this year and that latest Kantar figures, which showed Lidl and Aldi growing at 18% and 13.3% respectively, show that the road ahead for what Potts today called “the British underdog” is not only – as he said – going to be full of twists and turns. It is sure to be very challenging indeed, too.