Morrisons confident after strong Q1 results

Morrisons remains confident that it is turning around the business as it reports strong growth in the first quarter of the year.

The UK retailer saw like for likes excluding fuel grow to 3.4% in the 13 weeks to 30 April, up from 0.7% a year ago. The results mark the sixth consecutive quarter of like-for-like sales growth for Morrisons, with like-for-like transactions up 4.6%, although items were basket fell by 6.9%,

It follows good annual results in March in which the retailer saw 50% increase in profits, its first improvement in underlying profit and like-for-like sales in five years.

Chief executive David Potts said the new financial year had started well and it was concentrating on building a broader, stronger company, despite the external pressures of sterling which had pushed the cost of imported goods up.

“We are improving the shopping trip in many different ways, which is making Morrisons more popular and accessible for customers. These new initiatives in-store, online, in wholesale and services are beginning to build a broader, stronger Morrisons,” he said. “We are confident we will continue to turnaround and grow Morrisons.”

The quarter has seen the extension of the company’s premium offer, its ‘Best range, as well as well as unveiling a new online and in-store ‘Food to Order’ offer that allows customers to pre-order and a selection of nine award-winning wines, party food and flowers for special events. It also noted the growth of its tie-in with Amazon fresh, which launched last November and has since expanded its reach across London.

According to Kantar Worldpanel data released yesterday, the retailer was the fastest growing of the big four multiple this quarter, with sales up +2.2%, bolstered by the “huge growth” of its premium own label lines, which are attracting more affluent consumers.

This has been ongoing for more than six months, with Kantar’s consumer insight director Andy Crossan reporting in December that Morrisons has seen penetration of its premium private label increase in the 12 weeks before Christmas. He highlighted that in the 12 weeks to 4 December 2016, premium own label bottles at retail – wines over the £8 price mark – had attracted more 440,000 more households overall than in the same period the previous year.

The retailer has also just launched its Wine Festival 2017, with a range of bottles on promotion.