Major supermarket chain Morrisons saw like-for-like (LFL) trading creep up by 0.7 per cent year-on-year over the important Christmas trading period, results today confirm.
Total sales for the period – the six weeks to January 1st 2012 – jumped by 2.9 per cent excluding fuel and 5.6 per cent overall, thanks in large part to the expansion of its store numbers over the last 12 months, in a performance that it described as “in line with the market”.
These figures are more subdued than many had expected for the grocer, with a number of city analysts anticipating between two and three per cent growth in LFLs, and Morrisons today warned of more low sales results over the coming year.
Dalton Philips, CEO of Morrisons, commented: “I am pleased that in a difficult trading environment we have continued to grow our business and have delivered another good performance in a very tough market.
“At Christmas, when customers are even more focused on great quality food at outstanding value, we really need to serve our customers well.”
Morrisons also announced today that its net debt for its full-year is set to be in the range of £1.4 billion to £1.5 billion, and its programme to retire £1 billion of equity over the next two years is progressing well with 108.3 million shares acquired so far at a total investment of £316.6 million.
Clive Black, Analyst at Shore Capital, described the retailer’s performance as “disappointing” over the festive period but pointed out that 2012 will be a year of evolution for the chain which will decisive in its future.
“Morrison is amidst a period of major change,” Black said.
“Behind the scenes considerable work continues on the IT platform and processes of the retailer that amount to considerable self-help and from which we expect considerable support for margins.
“Such support will not be accessible forever and a day though and so it is also important that there is a vibrant and competitive retailer at the front-end too. In this respect there is also a major programme of work underway… including new store ideas and category management improvements.”
Along with a continued roll-out of its smaller format stores and new grocery concepts, such as M-Kitchen, press reports have suggested that Morrisons may acquire the 11 large out-of-town outlets that Best Buy is offloading for its children’s products brand Kiddicare to establish a physical presence.