Morrisons hopes for profits growth
SUPERMARKET giant WM Morrisons is confident a summer of sport and socialising will boost sales, according to chief executive David Potts.
The chain reported at its first quarter update yesterday that like-for-like sales – excluding fuel – had risen 2.7 per cent against the same period last year, which covered the start of the pandemic.
The result was ahead of analysts’ expectations of up to one per cent sales growth.
With lockdown measures easing further on Monday and hopes building that all restrictions will be removed on
June 21, Potts said his company expects sales and profits to rise.
He added: “There is much to be positive about as something approaching normal life begins to take shape. Our forecourts are getting busier, we are seeing encouraging recent signs of a strong rebound of food-to-go, takeaway counters and salad bars and our popular cafes will soon fully reopen.
“The nation has a summer of socialising and sport to look forward to and we’ll all be able to rediscover the joys of meeting up and eating well together. Whichever way consumers choose to enjoy their renewed freedom, we will be there for them.” With life slowly getting back to normal, Potts said Morrisons is predicting “meaningful profits growth” next year, as its results will not be hampered by coronavirus costs. Additionally, it will be boosted by the recovery in food-to-go, petrol forecourts, cafes and takeaway counters.
Potts added that with the outlook becoming clearer and Morrisons making progress with rebuilding profits and cutting debt, it will update its capital allocation plans in September when interim results are released.
The pandemic turbo-charged online shopping and Morrisons said orders during the first quarter were 113 per cent up on the same period last year. Its wholesale division, which supplies Amazon and McColls, also did well with sales up by 21 per cent.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said Morrisons’ recovery reflects the brighter picture across the sector.
She said: “Where Morrisons really powered ahead in the last quarter is the huge increases in food-on-the-go. The UK is back on the road, with fuel sales all but recovered to pre-pandemic levels.There’s positive read across for other supermarkets here.”