THE turnaround at Morrisons, which began a year ago with the sacking of chief executive Dalton Philips after a poor Christmas, has received a boost with better-than-expected sales figures for Christmas 2015.
However it will shut seven more supermarkets in what it hopes is the end of its store closure programme. It has not said which stores are under threat.
Like-for-like sales were up 0.2% for the nine weeks to January 3, putting the brakes on falling sales, which had ranged from -2.4% to -2.9% in the previous four quarters.
This figure excludes fuel and also the effect of the disposal of 140 M Local stores, which are now trading independently as My Local, and other supermarket closures it announced during last year. Total sales for the period were down 1.2%, excluding fuel.
Morrisons’ chief executive David Potts joined last March and from the start has been busy in effecting major changes to the company’s structure and operations as well as the shopping experience.
“We are pleased with our improved trading performance over the Christmas period,” said Mr Potts. “While there is of course much more to do, we are making important progress in improving all aspects of the shopping trip, and our customers tell us they are pleased with the changes.”
The Bradford-headquartered retailer expects underlying profit before tax to be higher in the second half of 2015/16 than the first half, and is forecasting a full-year figure of £295m-£310m, before the exceptional £60m costs from restructuring and store closures.
The retailer has further strengthened its financial position with net debt falling faster than forecast. It expects to end the financial year £300m better than previous guidance, in the range £1.65bn-£1.8bn.
Although the number of items per basket continue to fall, this is being partly offset by an increase in the number of transactions for the first time in the current difficulties, which suggests Morrisons is adapting to the trend that is seeing shoppers making smaller purchases more frequently at supermarkets.
It also said that “a greater focus on everyday value”, which included fewer multi-save promotions and providing bigger packs with better value, also hit items per basket.
Morrisons will release its full-year figures, for the financial yea to January 2016, in March.
