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Like-for-like sales make a healthy quarter for Morrisons

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Morrisons enjoyed rising like-for-like sales this quarter, giving credence to CEO David Potts’ efforts to reorganise and rebuild the grocer.

Excluding fuel, the 13 weeks to May 1 saw like-for-like sales rise 0.7%, though within the same category total sales were down by 1.8%. The chain claimed that this reflected the impact of store closures and the loss of the M Local chain, which was sold in September last year.

The results also displayed the impact of attempts by the company to “simplify and speed up” its operations, as well as improve the “shopping trip” of the average customers. Like for like transactions rose 3.1%, “in part driven” by a 17% year-on-year increase in sales of ‘Food to Go’, a range of ready-made items including sandwiches and sushi. The ‘Free From’ range, designed for customers with allergies, also saw a rise in popularity.

Morrisons worked towards customer convenience with increased investment in self scan and express checkouts, claiming “items per basket” decreased by 2.8% as a result of this. Although data on shopper habits show an increase in the number of shoppers making several trips a week for smaller baskets, it is unknown if Morrisons experienced a significant enough increase in frequency of custom for the reduced basket size to be seen as truly positive in this regard.

“We are encouraged by progress across our six priorities,” said Potts. “There is still much to do and our colleagues are working very hard to improve the shopping trip and save customers every penny we can. Customers are responding and satisfaction levels remain ahead of the year. We are of course pleased with a second consecutive quarter of positive LFL sales, which demonstrates our aim to stabilise trade is taking effect.”

Reaffirming “growing LFL” as “a key priority for every member of the Morrisons team”, the company said it remains “committed to a net debt target of £1.4bn to £1.5bn by year end.”

Published on Thursday 05 May by Philip Gallagher

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