Morrisons posts "solid" sales rise in face of challenges |
| Thursday, 04 December 2008 | |||||
 Morrisons posted a "solid" like-for-like sales rise of 8.1% in the third quarter of the year, aided by both fresh food and promotions, the supermarket said today.In the 13 weeks to 2 November, total sales were up 9.5%, while including fuel they rose 14.9%, Morrisons revealed. The company added that, despite it being a "difficult" time for shoppers, it is bringing an extra 700,000 customers through its doors each week as a result of its Price Crunch deals and the Market Street fresh food line. Morrisons said its Optimisation Plan, launched to try and maximise brand value and increase market share, is also proving successful. Chief executive Marc Bolland said: "In this challenging economic environment more customers than ever before are choosing Morrisons." The grocer said trading conditions will continue to be tough but that it has confidence in the strength in its "value proposition". Analyst James Monro, of S&P Equity Research, said: "We believe these results to be very healthy, particularly given the state of the UK economy, and highlight the strength of the Morrisons format as the recession deepens. "We believe the results justify our view that Morrisons can generate solid momentum and gain good ground in market share, depending on the length and depth of the economic downturn." Morrisons announced that it has entered into an agreement with the Co-operative Group (Co-op) to buy 38 stores. The purchase of these sites is conditional upon the Co-op's acquisition of Somerfield being completed successfully. Rival supermarket chain Tesco this week posted like-for-like growth of 2%, half its level of growth in the previous quarter. Last quarter, Morrisons witnessed sales grow by 7.6%, despite it being a "tough" trading period. Comment: Morrisons: blowing away the competition? >> Related Articles
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Steve Gates, Managing Partner of The Gap Partnership
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... As the credit crunch hits UK’s consumers, supermarkets are fighting for spend by slashing prices and introducing new lines of own brand goods. Today, against the current economic conditions, we saw Morrisons’ sales rise sharply, just two days since Tesco suffered its weakest sales growth since the mid 1990s. The Morrisons’ Price Crunch range has drawn extra customers using quality products at cheap prices. Key to this is their strong supplier relationships. Both Morrisons and their suppliers have adopted a constructive relationship. Price is an important negotiating point, and even more so in these times. But it is not the only one. In this deal, both sides have focused on other variables such as storage, delivery and promotional investment. The ultimate winner is the British consumer. |
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