Like-for-like (LFL) sales growth continued at supermarket chain Morrisons over the final six weeks of 2011, albeit at a slower rate than in the third quarter.
LFL sales excluding fuel, which strip out new stores openings and ignore petrol sales, were up 0.7% on the corresponding period of 2010; including fuel, LFL sales growth was 3.7%.
In the third quarter, LFL sales were up 2.4% (5.8% including fuel). Though the LFL sales growth rate over the Christmas period represents a slow-down, it is still likely to be a better performance than that notched up by sector leader, Tesco, which is widely expected to announce a decline in LFL sales later this week. Broker JP Morgan Cazenove has forecast a 1.5% slide in LFL sales at Tesco's UK stores.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In the six weeks to the beginning of January, total sales, excluding fuel, were up by 2.9% (5.6% including fuel).
Morrisons says it saw customer numbers grow by 800,000 over the Christmas period although it does not make clear which period this number is supposed to be compared to. The firm does say, however, that "Christmas trading came late this year with a greater emphasis on fresh food".
Morrisons is currently going though a £1bn share buy back process. So far it has acquired 108.3m shares for a total investment of £316.6m. The board expects net debt for the full year to be in the range of of £1.4bn - £1.5bn and "expectations for the full year remain in line with ... original assumptions."
Despite expecting to hits its targets, Morrisons reckons UK consumers are likely to remain cautious despite a reduction in inflationary pressures.
Commenting on the results Morrisons Chief Executive, Dalton Philips said: "I am pleased that in a difficult trading environment we have continued to grow our business and have delivered another good performance in a very tough market."
Over the last 12 months Morrisons shares have gained 15%.
BS
