Morrisons defied expectations of a slowdown today when it revealed a 10th consecutive quarter of rising group like-for-like sales.
The UK’s fourth-biggest supermarket chain defied the Beast from the East – which has been blamed by retailers including Greggs yesterday for poor trading in the spring – to report a 3.6% hike in first-quarter sales.
The supermarket sector has been rocked in the last week by the prospect of a £12billion mega-merger between Sainsbury’s and Asda, in what would be the biggest shake-up since Morrisons itself took over Safeway 14 years ago.
The Sainsbury’s and Asda tie-up could hit Morrisons by sparking a price war
The tie-up will create a group bigger than Tesco with revenues of £51billion and a network of 2,800 stores.
That would hit Morrisons by sparking a price war, as discounters like Aldi and Lidl match post-merger price-cuts promised by Sainsbury’s boss Mike Coupe.
But in the current climate Morrisons is doing well, with the revival under bos Dave Potts – a former Tesco man – continuing apace.
In its update, Morrisons said supermarket and online sales growth eased slightly to 1.8 per cent in the 13 weeks to May 6, down from 2 per cent in the previous three months, but this was still better than forecast.
David Potts is chief executive of Morrisons
The group said it was ‘now open for business as a wholesaler’, with the division largely behind the impressive performance, with sales up 1.8 per cent – a surge from the 0.8 per cent seen in the previous three months.
Chief executive David Potts said: ‘We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth.
‘We expect to continue to improve in the year ahead.’
Shares lifted 3.5 per cent after the update.
Analysts have praised the turnaround plan being led by Mr Potts, including his recent launch of the cut-price Wonky vegetable range and wholesale push through deals such as that with McColl’s.
Morrisons held on to its market share at 10.5 per cent in the most recent industry data from Kantar Worldpanel, while Tesco remained at 27.6 per cent, and Sainsbury’s and Asda both lost ground at 15.9 per cent and 15.5 per cent respectively.