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Morrisons sales suffer over ‘unusually challenging’ Christmas period

 

Wm Morrison said group sales were down 1.7 per cent on a same-store basis in the 22 weeks to 5 January amid “unusually challenging” conditions, but held its profit forecasts for the current year unchanged.Total sales in the 22-week period were down 1.8 per cent, or 2.9 per cent if fuel sales are included.The Bradford-based supermarket chain did not provide a figure for the Christmas period in isolation; last year, sales in the nine weeks around Christmas rose 3.6 per cent. “In previous years we have used Black Friday as a springboard into Christmas but we held back from that this year. When we talk in the statement about learnings, that’s one of the things we’ll reflect on,” chief executive David Potts told reporters on a conference call. “We missed it a bit more than we replaced it.”“We always say that Christmas comes a bit later every year but didn’t happen as much this year,” said Mr Potts, although he played down the impact of the general election on sales. The impact of promotional activity was profound, especially in areas such as beer, wine and fuel. Most items in Morrisons’ own “Christmas basket” of essentials were either the same price or cheaper than last year. Sales at the UK’s fourth-largest grocer have been losing momentum since the heady summer of 2018, when the football World Cup and warm weather boosted sales across the industry. In that quarter, sales through the supermarkets grew 2.5 per cent, a level that has not been achieved since. Growth in its wholesale operation, which supplies convenience group McColl’s and petrol station operators among others, has also slowed as volumes have increased. In the third quarter to November 5, which was also reported today, wholesale sales were down 0.1 per cent. The company said it had been impacted by lower total sales at McColl’s.

Morrisons’ most recent performance is a stark contrast with Aldi, which yesterday reported sales growing 7.9 per cent in total over the four weeks to Christmas Eve, although it did not provide a same-store sales figure and its headline growth rate was slower than in the previous two years.Looking ahead, Mr Potts said there was a sense of greater optimism since the election but that it had not yet shown up in the numbers. He added a full resolution of the Brexit issue — which has “taken a Christmas break” — would be needed in order for customer confidence to return in earnest. In its estate, the company sold its Camden store to housebuilder Berkeley for £120m. Four new stores opened and the same number of underperforming stores were closed. Another 25 stores were refurbished in the “Fresh Look” format, taking the total to 44 in the current year.