Morrisons closes seven stores despite surprise festive boost

MORRISONS is to close seven lossmaking supermarkets despite beating forecasts with its best festive sales performance in years.

A doubling of online sales and a 25pc rise in revenues at its Nutmeg clothing line helped Britain’s fourth largest grocer break a four-year spell of falling sales.

The boost comes as latest industry figures revealed discounter Aldi gained more share of the grocery market than Waitrose. Data from Kantar showed Sainsbury’s was the star performer among the big four grocers showing sales increasing by 0.8pc for the 12 weeks January 3. Sainsbury’s will reveal its festive sales today.

Tesco, Asda and Morrisons all lost market share and saw sales fall by Kantar’s measure.

Morrisons was expected to be the dog of the sector during the festive period but the grocer yesterday stunned the City with its figures, sending the shares up almost 9pc or 13.2p to 165.5p by the close. Sales from stores open at least a year were up 0.2pc for the nine weeks to January 3.

That compares to forecasts of a 2pc fall.

Chief executive David Potts said: ‘We are pleased with our improved trading performance over the Christmas period.

While there is of course much more to do, we are making important progress in debt reduction, and our financial position is strong and getting stronger.’

He said Morrisons had been on a ‘steep learning curve’ at Christmas and there was much to improve on in coming years.

‘We are the small guy in the squeezed middle,’ he said. ‘We are the underdog.’

Potts said up to 680 jobs were at risk after announcing seven more supermarkets would shut.

Last year it pulled down the shutters on 21 stores and sold off its chain of 140 convenience shops.

The reduction in the number of shops dragged total sales down 1.2pc in the period.

The grocer’s focus on making foods as well as selling it – Morrisons is the only grocer that owns abattoirs and meat processing plants – attracted more shoppers through its doors.

The number of transactions compared with the same period last year increased 1.3pc.

Its partnership with Ocado selling Morrisons food online was a big success with sales growing almost 100pc compared to last year. It delivered three times as many Turkeys as last year.

Potts said he will roll out the Nutmeg clothing range into all stores and is investigating selling it online.

Over December customers bought 10,000 fur coats for babies, and three times as many Christmas jumpers compared to last year.