Morrisons sales fall amid ‘fragile and difficult’ consumer environment
Morrisons saw its group like-for-like sales excluding fuel decline by 6.4% in its second quarter after it was hit by a “very challenging” trading environment.
The supermarket said the decrease came amid ongoing inflationary pressure and an increasingly subdued consumer sentiment, although trading improved towards the end of the period.
Meanwhile, total revenue was up 2.6% to £4.6 billion in the 13 weeks to 1 May while adjusted EBITDA climbed by 14.5% to £71 million. The total revenue uplift was mainly due due to a recovery of fuel sales, which increased by 54%.
David Potts, Morrisons chief executive, said: “In a very fragile and difficult consumer environment, Morrisons has continued to deliver a resilient performance. This quarter traded over a period of significant Covid restrictions last year when travel and hospitality were both severely limited. As those two activities returned to more normal patterns this year, we saw very strong growth in fuel sales but a step back in grocery. ”
During the quarter, the supermarket launched one of its biggest ever price cut campaigns which covered over 500 products and included price reductions for over a quarter of entry level products.
Earlier this month, the supermarket’s £7 billion takeover by US private equity firm Clayton, Dubilier & Rice was given the green light by the Competition and Markets Authority following the new owner’s plan to sell dozens of petrol stations.
Looking ahead, Potts said: “Now that the CMA process has concluded, we are looking forward to working more closely with CD&R as we continue to drive the key pillars of our strategy, focused on being a broader, stronger, popular and accessible business.
“I want to thank Morrisons colleagues for their dedication and hard work in helping the business rise once again to meet the new challenges of the cost of living crisis.
“Together with CD&R, we are determined that colleagues’ pay, health, well-being and happiness must remain at the very centre of our thinking as we start a new and important phase in the company’s history.”
