Sparkling festive performance by Morrisons
SUPERMARKET group Morrisons today gave the UK retail sector a welcome shot in the arm unveiling better than expected Christmas sales which were up by 9.5%.
The Bradford-based chain's growth in sales in the six weeks to January 6, excluding fuel, was the best festive performance in the supermarket sector and well ahead of market leader Tesco which saw a 3.1% rise in sales during the period while number two player Sainsbury's saw a 3.7% increase in sales in the 12 weeks to December 29.
The figures were even better than City analysts had predicted – they had expected a sales rise at Morrisons of between 5% and 8%.
Chief executive Marc Bolland said that Morrisons' board was confident its full-year profit would be at the top end of its expectations. He said this would be helped by £30m of costs from its 'optimisation plan' to improve performance being included in next year's figures.
Total sales, including the contribution of new stores, were up 11.6% or 13.6% including fuel sales.
However the group, which has 375 stores, said that it expects the market to “remain competitive”.
“We are cautious on the outlook for consumer spending. However, we believe that our strong value credentials will serve us well in these conditions,” said Mr Bolland.
Morrisons has been taking market share from rivals over recent months. According to figures from research group TNS, the group's share of the UK grocery market grew from 11% to 11.4% over the 12 weeks to December 30.
Georgina Mitchell, head of investment services at Leeds-based national stockbroker Redmayne-Bentley, said: “Larger peer Tesco's performance appears to be slipping. This comes on the back of recent TNS data which showed that the Bradford-based food retailer has managed to increase market share when compared to the same time last year.
“As Wm Morrison establishes itself further in the south east, an area which it only entered following the takeover of Safeway in 2004, there is potential for this gross to continue.”
Redmayne-Bentley was stockbroker to Wm Morrison Supermarkets when it floated on the stock market in in 1967.
Mr Bolland said that the festive advertising campaign featuring singer Lulu and football pundit Alan Hansen and focused on fresh food and promotional deals had “brought more customers into our stores, with over four million extra customer visits over the six week Christmas period”.
Sales were also boosted by a new staff discount scheme introduced in November which added 1.5% to its sales figures.
Mr Bolland, said: “I am delighted with our Christmas performance. We welcomed significantly more customers to our stores, and they were well served with attractive offers and great fresh food. These strong results are further evidence that our rigorous focus on freshness, service and value is striking a chord with shoppers.”
Morrisons' year end is February 3 and it is expected to report full-year results in March.
Today it confirmed that property director Roger Owen has delayed his retirement from October this year until February next year so he can complete the projects he is currently involved in.
