Morrisons sales suffer over Christmas period

Morrisons has been hit by an “unusually challenging” festive period, it has announced in its latest trading update.

Like-for-like sales, including fuel, were down 2.8% in the 22 weeks ended 5 January. Total sales were down 2.9%, including fuel.

The supermarket giant said that conditions during the period “remained challenging” and that the customer uncertainty of last year was “sustained”.

Despite this, it remained “focused” on its customers, whilst managing costs and investing in its price list. 

The company also saw a sales growth in its wholesale division, yet overall like-for-like growth was impacted by lower total sales at McColl’s, whose wholesale goods are supplied by Morrisons. 

In line with this supply agreement, McColl’s converted 10 of its sites to Morrisons Daily convenience stores. Sales at these sites were “strong” throughout the period, and Morrisons said it plans to “further tailor and test the proposition” and extend the conversion trial to a further 20 sites in January and February.

During the period, four new sites were opened by the retailer, while four “underperforming” sites were closed. Some 25 Fresh Look stores were launched, bringing the company’s total to 44. 

Morrisons also sold its Camden store, and eight-acre surrounding site, to Berkley Group for a total consideration of £120m. The group will build a new Morrisons supermarket and convenience store on the site at a cost of around £35m, paying a further £85m in stages throughout the project. 

David Potts, chief executive, said: “It was encouraging that during an unusually challenging period for sales, our execution was strong and our profitability robust, demonstrating the broad-based progress we have made during the turnaround. 

“This was again down to the hard work of Morrisons exceptional team of food makers and shopkeepers.” 

He added: “As always, we will take some learnings into the new year, and look forward to 2020 with a strong plan and solid foundations on which to continue to grow.”

Morrisons said it expects its full year profit before tax to be in line with the current range of analysts’ forecasts.