Morrrisons facing tougher times
Profits on track despite lower like-for-likes
Morrisons’ like-for-like sales were essentially flat across the Christmas trading period, as the supermarket operator faces tough competition.
In the six weeks to January 9, total sales for the Morrisons fascia grew by 31.9 per cent. However. excluding new stores and those converted from the Safeway brand, like-for-like sales grew by just 0.1 per cent, or 4 per cent includng fuel sales.
The company said its like-for-like performance was affected by new stores opened by competitors, with some existing Morrisons stores seeing sales cannibalised by Safeway conversions.
There was also one less trading day than a year ago, as well as “aggressive couponing activity by others to support the relaunch of stores which we were required to divest”. Morrisons said the performance of its core stores is “acceptable short term” given tough 2003 comparatives of 9.6 per cent like-for-like growth.
Over the six weeks, sales at stores still trading under the fascia fell by 8.4 per cent on a like-for-like basis. By the end of November, 56 stores had been converted, with those stores trading 4.7 per cent higher than during the same period last year, and up 7.2 per cent including fuel. A further 180 stores will be converted this year.
Morrisons said: “We served our customers well in both Morrisons and Safeway over the Christmas and New Year period ensuring good availability which was well judged and resulted in minimal carry over of seasonal stocks, particularly when compared with the residues experienced by Safeway 12 months ago. This has allowed us to present the stores in their best possible light in the post holiday period.”
The company said its full year perfomance is on target, with like-for-like growth in Morrisons stores of 5 per cent after 49 weeks of the year. However, the company warned that future like-for-like comparatives in Morrison stores will continue to be lower than in recent years. “Nonetheless we remain confident we can build on the encouraging rise in customer numbers at Safeway and achieve an increase in the basket size in both converted and unconverted stores.”
