Morrisons reports Q1 sales rise as wholesale arm launches
Bradford-headquartered supermarket Morrisons has seen total sales in the first quarter of 2018 rise 3.8%, during a period when it launched its wholesale business.
Reporting on the 13 weeks to 6 May, Morrisons said its total group like-for-like sales were up 3.8% excluding fuel (2.1% including fuel). The supermarket’s LFL transactions were up 4.6%, meanwhile the LFL items per basket dropped 6.9%.
During the period Morrisons became “open for business” as a wholesaler. The firm started supplying its new partner McColl’s through a rolling programme of around 25 stores per week during the first quarter.
Overall, its wholesale supply initiatives contributed 1.8% to Group LFL. Morrisons said of the wholesale arm of the business: “We are on track for our targets of £700m of annualised sales by the end of the year and £1bn in due course. “
The stores are supplied with fresh, frozen and ambient offer from Morrisons, comprising both brands and the new Safeway range. In addition, Morrisons said it had begun supplying some McColl’s stores with tobacco and ambient products earlier than initially planned.
Today’s update comes just two weeks after its major two competitors, Asda and Sainsbury’s, announced a possible merger which would create a £51bn revenue grocery giant if approved by the CMA.
David Potts, Morrisons chief executive, said: “We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth. We expect to continue to improve in the year ahead.
“During a busy period of exciting new ranges, new store openings, strong supermarket and wholesale growth, and the peaks and troughs of the seasons, our colleagues once again did an outstanding job for customers.”
The firm said it had continued to invest in the customer shopping trip and improved competitiveness. Inflation was broadly flat and volume growth accelerated during the period, said Morrisons.
Two new stores were opened in the period, in Abergavenny and St. Ives near Cambridge.
Morrisons added: “As announced at our recent preliminary results, we expect net debt to continue to fall during 2018/19, although first half phasing will be impacted by the timing of payroll payments due to last year’s 53rdweek.
“Our expectations remain unchanged and we are confident of another strong year ahead.”
