Morrison's first quarter sales beat market forecast

Morrison Supermarket posted a 1.8 per cent drop in like-for-like sales for the first quarter as the UK grocer invested in opening more convenience stores.

Morrison Supermarket posted a 1.8 per cent drop in like-for-like sales for the first quarter as the UK grocer invested in opening more convenience stores.

The jump in sales, which excludes fuel, for the 13 weeks to May 5th beat analysts' expectations for a 2.0% decline and were up from the previous quarter's 4.1% drop. Including fuel, like-for-like sales increased 2.6%.

Total sales, excluding fuel, were up 0.6%, but down 0.3% including fuel.

Morrisons said since its last results it has focused on a strategy to improve its stance against rival supermarkets including Tesco and Sainsbury.

Part of its plan includes expanding its convenience offering through its Morrison M local stores.

During the period, the company opened six stores, including two Morrisons M locals and acquired more than 80 stores to add to its convenience pipeline.

The grocer said it was on track to meet its target for 100 convenience stores open by the end of the year, with 20 up and running in the first half.

Morrison also used a marketing strategy to promote the grocer's competitive prices and fresh food offering through its More of What Matters campaign. It came after the supermarket was rocked by the discovery of horsemeat in some of its beef products as part of an industry-wide scandal.

"Customers now understand our unique approach to sourcing meat through our own livestock buyers and abattoirs," the business stressed.

The company said it also invested in beating competitors with its pricing through its Pick of the Street offers and Payday Bonus loyalty reward programme.

Its first online food operation is on track for a January 2014 launch and discussions with Ocado are ongoing.

Morrison ended the quarter with a net debt of £2.3bn which was in line with expectations. The financial position of the group remains strong, it added.

"We have made a solid start to the year, with our sales performance improving since the last quarter," said Chief Executive, Dalton Philips.

"Our promotions have been more innovative and we are explaining Morrisons points of difference more effectively. These efforts were further reinforced by the horsemeat scandal which helped drive increasing customer recognition of Morrisons unique supply chain and approach to meat sourcing.

"Strategically, our ambition of building a genuinely multi-format, multi-channel Morrisons is right on track."

While the firm remains cautious on the economic environment and consumer spending, its full year expectations remain unchanged.

RD

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021
Nuclear power might never be popular – but now looks a good time to invest
Commodities

Nuclear power might never be popular – but now looks a good time to invest

Nuclear power gets a very bad press, but it is the ultimate renewable energy source. Interest in it is perking up again, says John Stepek. Which means…
9 Apr 2021
House prices: from boom to even bigger boom
House prices

House prices: from boom to even bigger boom

UK house prices have risen to new to record highs, says Nicole Garcia Merida. Demand continues to outpace supply, but continued low interest rates, th…
9 Apr 2021