Morrisons hails strong sales over festive period

Supermarket chain, Morrisons, says its sales have continued to be strong, particularly over the Christmas and New Year period when its like-for-like (LFL) sales, excluding fuel, improved to 9.3%.

For the first 22 weeks of half two to 3 January, LFL sales for the Bradford-headquartered business, excluding fuel were up 8.1%, comprising contributions from retail of 7.2% and wholesale of 0.9%.

However  LFL fuel sales were down 23.1%, which the firm attributed to the impact of various new lockdowns and tier restrictions implemented during the period.

Total sales were up 8.7% excluding fuel (up 2.3% including fuel) with three more stores opened during the period, bringing the total to six this year. 

Morrisons says it still expects 2020/21 pre-tax profits to be in line with its expectations, in the range of £420m – £440m prior to the rates payment of £230m.

Its trading update adds: “Since our last update in early December, the Government has introduced further new tier systems and other restrictions.

“As a result, as well as the extra £40m direct Covid-19 costs we announced in early December, we now expect to incur a further c.£10m before year end to cover costs such as additional colleague absence, meaning total direct Covid-19 costs of c.£280m for 2020/21.

“In addition, the extra restrictions mean all our cafés are again closed, and areas such as fuel and food-to-go are once more affected, with a further profit impact before year end similar to the extra Covid-19 costs we are announcing today.

“However, we expect the sustained and significant operational gearing from the strong sales growth to offset these extra Covid-19 costs and profit impacts.”

David Potts, chief executive, said: “The pandemic has had a severe effect on people and communities around Britain for nine months now but it has been especially hard at Christmas time. 

“I’m very pleased with the way the Morrisons team has helped our customers across the nation enjoy their Christmas in the best way they could – with safe shopping, great service and outstanding stores even in the most difficult circumstances. 

“But I’m even more proud of the broader contribution that the Morrisons team has made to the communities we serve – through foodbank donations, doorstep deliveries to the vulnerable, discounts for key workers, the work of our 500 community champions and the countless small acts of kindness that have made a particular difference this year.”

The update comes after Boris Johnson last night announced that all non-essential retail would close as England enters a third lockdown in order to curtail the spread of Covid-19. Morrisons and all supermarkets however will continue to remain open during this period, which will further impact results moving forward.