Morrisons has reported better-than-expected sales growth in the first quarter after reaping the rewards of price cuts and strong Easter trading.
The supermarket chain said like-for-like sales grew 3.4 per cent in the three months to 30 April, ahead of analyst expectations and an acceleration on the previous quarter’s 2.9 per cent.
Of the three major players, Morrisons seems to be in the highest gearGeorge Salmon
Chief executive David Potts said: “We are improving the shopping trip in many different ways, which is making Morrisons more popular and accessible for customers.”
He added that the group was “working hard” to remain competitive, despite an increase in the price of food imports linked to the collapse in the Brexit-hit pound.
The company said its Price Crunch initiative has seen more customers come through its doors, with sales over Valentine’s Day, Mother’s Day and Easter particularly strong, while its deal to sell groceries through Amazon continues to grow.
Potts has ploughed investment into price cuts and called time on under-performing stores in his attempts to turn the page on the supermarket’s ill-fated era under ousted boss Dalton Philips.
His efforts come as the grocery sector’s so-called “big four” – Tesco, Asda, Sainsbury’s and Morrisons – remain locked in a bitter price war sparked by German discounters Aldi and Lidl and face further challenges from an expected slowdown in consumer spending.
Figures published yesterday by market researcher Kantar showed that Morrisons was the fastest-growing of the big four, helped by its The Best line attracting more affluent shoppers, with sales up 2.2 per cent, although its market share fell 0.2 percentage points to 10.4 per cent.
George Salmon, equity analyst at Hargreaves Lansdown, said: “There is a long road ahead of the UK’s supermarkets, but, of the three major players, Morrisons seems to be in the highest gear. Customers are flocking back, and like-for-like sales growth is trending strongly upwards.
“The transformation, spearheaded by CEO David Potts, is by no means complete; after all the weaknesses in online and convenience are still glaringly obvious. Nonetheless, progress thus far has been impressive.”