Fuel sales shore up results at Morrisons amidst tough trading conditions
Bradford-headquartered supermarket chain, Morrisons, has issued an update on its quarter two trading for the 13 weeks ending 1 May 2022 which saw its like-for-like sales drop 6.4%.
The business notes that with ongoing inflationary pressure and an increasingly subdued consumer sentiment, the trading environment has been very challenging.
Total revenue for the period, including fuel, was up 2.6% to £4.6bn. This increase was mainly due to recovery of fuel sales, which increased by 54%, partly offset by a decline in supermarket like-for-like sales.
Adjusted EBITDA grew £9m to £71m, compared to the same period in the prior year reflecting recovery of profit from areas impacted by Covid and cost savings.
David Potts, Morrisons CEO, hailed a resilient performance for the business during a “very fragile and difficult” consumer environment.
He said: “This quarter traded over a period of significant Covid restrictions last year when travel and hospitality were both severely limited.
“As those two activities returned to more normal patterns this year, we saw very strong growth in fuel sales but a step back in grocery.
“Retail like-for-like sales in the quarter were also impacted by the discounts we offered last year to NHS staff, teachers, farmers and Blue Light cardholders, as a thank-you for their amazing work on behalf of the nation through Covid.
“In April we launched one of our biggest ever price cut campaigns which included over 25% of our entry level products.”
On 9 May, as previously reported, Morrisons acquired the entire McColl’s convenience business from the administrators, comprising 1,160 stores – including 270 Morrisons Daily branded stores – together with 16,000 colleagues.
The acquisition is currently under investigation by the Competition and Markets Authority. (CMA)