Fortunes diverge at Asda and Morrisons
THE fortunes of Yorkshire’s two biggest supermarkets are diverging.
Morrisons is operating fewer stores than last year which contributed to sales falling 3.2%, according to Kantar Worldpanel. Despite this, there is optimism in the market for
Market share dipped to 10.6%, however online growth is looking promising for the retailer.
Morrisons recently re-entered the FTSE 100, ousting embattled Sports Direct.
This followed an announcement that the grocer had teamed up with US online giant Amazon to sell its products through the site.
Analysts called it an “inspired” move, and Morrisons’ share price jumped to 203.1p. Less than three months ago the grocer had hit an 12-year share price low.
Kantar Worldpanel head of retail and consumer insight Fraser McKevitt said that this upward online trend was set to continue for Morrisons as it converts more in-store shoppers to its ecommerce channel.
He was also optimistic that the Amazon deal could provide a much-needed boost to the business.
Related: Morrisons set to return to the FTSE 100 after share price surge…
For their Yorkshire rival, things are not going so smoothly.
Analysts at Kantar said that sales in larger stores have fallen by 2.0% as consumers spend less per average trip.
This has affected Asda with its large stores “disproportionately”, with sales falling by 4% and market share down to 16.2%.
Leeds-headquartered, US-owned Asda last month reported that sales fell to £1bn. It experienced its worst-ever quarterly sales drop .
Sales were down 5.8% in the 13 weeks to January 1, worse than the previous two quarters of -4.7% and -4.5%, which caused chief executive Andy Clarke to describe it the period as a “nadir” for the business.
It has responded to the crisis in the grocery sector with ‘Project Renewal’ which it launched last October. The 18-month programme has been designed to “extend Asda’s everyday low price”.
According to Kantar, supermarket sales have overall grown by 0.5%, the fastest growth in five months.
