Bumper festive sales at Morrisons
Grocer’s best Christmas results for seven years
RETAIL: Morrisons enjoyed its best performance for seven years over the festive period and raised its profit guidance as customers return to its stores.
Bumper sales of prosecco, flower bouquets, reduced price vegetables and party food helped the Bradford-based chain report a 2.9 per cent rise in likefor-like sales.
MORRISONS ENJOYED its best performance for seven years over the crucial festive period and raised its profit guidance as customers flock back to its stores.
Bumper sales of prosecco, flower bouquets, reduced price vegetables and party food helped the Bradford-based chain report a better than expected 2.9 per cent rise in like-for-like sales over the nine weeks to January 1.
Chief executive David Potts said the group had “found our mojo” over the festive period.
“We sold 2.4 million bottles of prosecco – quarter of a million more than last year,” he said.
“One in six bouquets of flowers came from ‘Mozzers’ and we sold 7,000 tonnes of vegetables in our veg deal where you could buy six items for £2 – that was the knockout deal of Christmas week.”
Another strong performer was the group’s ‘Best’ range, with over half of customer baskets including at least one ‘Best’ item.
Morrisons launched over 100 new ‘Best’ products especially for Christmas shoppers in addition to the first 470 which were launched in the autumn. Bestsellers included smoked salmon with gold lustre and it sold 50,000 packs of ‘shimmering macarons’.
Mr Potts, who has been leading a turnaround since taking the helm last year, said the group also sold 37,000 Santa-shaped butter packs.
Analysts hailed the trading update.
Phil Dorrell, partner at Retail Remedy consultants, said: “Morrisons like-for-like sales growth over Christmas is quite remarkable and all the more noteworthy coming on top of last year’s likefor-like growth.
“Potts has turned this ship around and whilst navigating a big tanker like this takes time, his grip on the tiller is both clear and strong.”
Analyst Bruno Monteyne at Bernstein said: “This strong result from Morrisons reflects good execution as customers lost over the past few years come back to stores.
“We also expect it to reflect an overall strong Christmas by UK food retailers with this result boding well for Sainsbury’s and Tesco results later this week.“
The number of transactions rose by over 5 per cent and Morrisons said two thirds of this was thanks to new customers.
Sales of its Nutmeg clothing range rose 30 per cent and the Morrisons website recorded its best week for sales over the festive period, with online contributing 0.6 per cent to like-for-like growth.
The group is pencilling in underlying pre-tax profits of £330m to £340m for the year to the end of January, ahead of City expectations of £326m and a significant rise on the £242m a year earlier.
Mr Potts said a raft of changes made under a revival plan had helped drive the Christmas sales growth.
“We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system,” he said.
The group said it was “difficult to speculate” on inflation for 2017, but the weak pound had forced up the price of some products over Christmas, such as whole salmon.
Morrisons sales growth over Christmas is quite remarkable. Phil Dorrell, partner at Retail Remedy consultants