Glimmers of hope for Morrisons

Supermarket Morrisons enjoyed better-than-expected sales over Christmas.


Morrisons produced a positive surprise

The supermarkets reported their Christmas sales figures this week. Wm Morrison produced a positive surprise for a change, reporting like-for-like sales growth of 0.2% in the nine weeks to January, the first rise in four years. Online revenue almost doubled. J Sainsbury underlined its position as one of the more resilient mid-market players, with underlying sales falling by a better-than-expected 0.2% over the holidays.

What the commentators said

In addition, according to Mike Watkins of research group Nielsen, Tesco and Sainsbury's are both doing better than a year ago. "With deflation now likely to have reached its low point, and the intensity of promotions continuing to fall, the industry has a good chance of returning to positive growth." As for Morrisons, new CEO David Potts apparently has "a better feel" for his customers than his predecessor, said Alistair Osborne in The Times. He cut prices by another 3.2% over Christmas, narrowing the value gap with the discounters, and "also pinched some of [their] volume selling tricks", boosting the size of the vegetable bags.

Still, there's a long way to go, said James Moore in The Independent. The figures compare with a lousy holiday season in 2014/2015. The online division, meanwhile, comes from a deal with Ocado by the previous management "desperate to catch up with rivals". "The current team is stuck with it for another 23 years and it's fair to say they're not exactly happy about it."

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Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.