Morrisons has surprised the market with prediction-beating Christmas trading results. While CEO David Potts is "pleased", he has outlined intentions to close a further seven underperforming stores.
Analysts had predicted declining sales at Morrisons which, like the rest of the big four grocers, is facing food deflation, changing shopper habits, the unprecedented growth of the low cost discounters, convenience stores and the internet.
But the grocer has recorded a 0.2% rise in like-for-like sales (excluding fuel) over the nine weeks to 3 January, when compared to the same period last year and a 1.3% increase in like-for-like transactions across core supermarkets, indicating that customers are returning to stores.
Online sales helped Morrisons’ performance, at double that of the previous Christmas.
Potts waived the importance of online sales growth, citing that it was less important than earlier in the year, and attributed the retailer’s festive performance to the stores.
“While there is of course much more to do, we are making important progress in improving all aspects of the shopping trip, and our customers tell us they are pleased with the changes,” he said.
Following 11 store closures last year, a further seven medium-sized supermarkets will cease trading this year, in line with Potts’ cost-cutting plans. Around 680 staff members are being consulted with over potential redundancy.
“I’m pleased with the performance over Christmas but Christmas is just one trading period and we go on from there,” he said. “This turnaround will not be in a straight line as we continue to learn about the business and how we might improve it. Every week in retail is a battle.”