First quarter like for like sales down at Morrisons

SUPERMARKET group Morrisons today said it had made a “solid start” to its new financial year despite seeing like for like sales drop by 1.8% in its first quarter.

Taking into account fuel, sales were down 0.3% and like-for-like sales were down 1.8% (2.6% including fuel). Total sales excluding fuel rose by 0.6%.

Bradford-based Morrisons said its first quarter performance was an improvement from the previous quarter and was in line with its expectations.
 
Earlier this year the grocer announced its first fall in profits for six years with pre-tax profits down 7% to £879m and like-for-like sales down 2.1% in the year to February 3.

Chief executive Dalton Philips said: “We have made a solid start to the year, with our sales performance improving since the last quarter. Our promotions have been more innovative and we are explaining Morrisons points of difference more effectively. 

“These efforts were further reinforced by the horsemeat scandal which helped drive increasing customer recognition of Morrisons unique supply chain and approach to meat sourcing. They now understand that Morrisons is best placed to sell food that is what it says it is.
 
“Strategically, our ambition of building a genuinely multi-format, multi-channel Morrisons is right on track.”

Morrisons said it was benefiting from initiatives such as its ‘Pick of the Street’ offers on fresh products and its ‘Payday Bonus’, which rewards loyalty at the end of each month.
 
During the quarter Morrisons opened a further six stores, including two Morrisons M locals and also acquired more than 80 stores to add to its convenience pipeline. 

“We are on track to meet our target of having 100 convenience stores open by the end of the year, with 20 opening in the first half,” it added. 
 
Morrisons said its ‘Fresh Format’ concept would be in more than 40% of its estate by the end of the current financial year, and that Nutmeg, its recently launched children’s clothing range, was now available in more than 100 stores. It added that plans to launch its first online food operation by next January were progressing. 
 
Net debt of £2.3bn is in line with expectations, the group, which yesterday said its directors had been refused bonuses, share awards and a salary increase last year, said.
 
Commenting on the outlook, Morrisons said: “Although we remain cautious on the economic environment and consumer spending, our full year expectations remain unchanged.”