Morrisons sees sales growth outpace rivals
MORRISONS HAS been crowned the fastest-growing big four supermarket, raking in sales growth of 2.2 per cent over the three months to April 22, according to the latest figures from Kantar Worldpanel.
Kantar said Morrisons continues to prove a favourite with shoppers in its northern heartlands, but the Bradford-based grocer is also excelling in the capital, where it is growing at its fastest rate.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Morrisons is getting the basics of retail right.
“Its sales have been growing since January 2017 – the best part of a year and a half.
“Morrisons is attracting more shoppers. It attracted 230,000 additional shoppers in the last 12 weeks – more than its big four rivals.”
He said that Morrisons has continued with promotions at a time when its rivals have cut them.
“Everybody likes a bargain,” said Mr McKevitt.
“Morrisons also continues to invest and develop its own label lines. ‘The Best’ (Morrisons’ upmarket range) is growing 14 per cent year on year.”
He said the firm’s growth in London comes from a low base and Londoners have welcomed Morrisons’ online offer.
In contrast, Sainsbury’s and Asda, which announced a £12bn merger on Monday, had the slowest sales of the big four chains.
Sales at number two ranked Sainsbury’s rose 0.2 per cent, while Leeds-based Asda saw growth of 1.4 per cent.
Current market leader Tesco posted sales growth of 2.1 per cent
Talking about the Sainsbury’s/ Asda merger, Mr McKevitt said: “This is a pivotal moment for the British grocery market.
“A merger between Sainsbury’s and Asda would transform the traditional landscape placing nearly a third of market share in the hands of the joint supermarket giant, though the march of the discounters – and any enforced store closures – could impact this figure.”
He added that Sainsbury’s acquisition of Asda’s big stores could create a new outlet for Sainsbury’s Argos stores.
In addition, he pointed to Walmart’s buying power. US supermarket giant Walmart, which bought Asda in 1999, will retain a 40 per cent stake in the new business.
“I’m sure sourcing through the world’s biggest retailer is part of the plan,” said Mr McKevitt.
Asked whether the Competition and Markets Authority (CMA) will insist on store disposals in order to agree the deal, he said: “I can’t imagine there won’t be some disposals.
“The CMA has looked at the local level in the past. That said, Sainsbury’s and Asda are not proposing to merge their brands.
“When it comes to the supplier question, will the CMA consider that 60 per cent of sales is through two groups?”
If the Sainsbury’s and Asda deal is approved as it stands, the new group and market leader Tesco would have around 60 per cent of the grocery market.
When asked what impact the deal could have on Tesco and Morrisons, Mr McKevitt said: “I think it’s going to become an even more competitive market place out there.
“It will bring a renewed focus on price. Morrisons is very strong in its northern heartland.”
The proposed merger between Sainsbury’s and Asda would result in a combined entity with a potential grocery market share of 31.4 per cent
Mr McKevitt said that Asda achieves nearly two-thirds of its sales outside London and the south east of England in contrast to Sainsbury’s, which registers 59 per cent of its sales in these two areas.
15.8 million households bought their groceries at Asda over the past 12 weeks – 500,000 more households than shopped at Sainsbury’s