Morrisons sales rise leaves Tesco trailing

Published on Thursday 4 December 2008 09:05

SUPERMARKET firm Morrisons today reported that its sales are rising at four times the level of market leader Tesco.

The company said like-for-like sales, excluding fuel, have surged ahead by 8.1 per cent, helped by a strong performance by its value ranges and cut-price deals.

The figure towers ahead of Tesco, which said earlier this week that its like-for-like sales growth excluding fuel in the third quarter had halved to two per cent.

Morrisons said its efforts to keep shopping bills and fuel costs down had proved "extremely popular", with more than 700,000 new shoppers visiting its stores each week.

The company is also in the process of running a successful advertising campaign featuring Richard Hammond, Denise Van Outen and Alan Hansen.

Chief executive Marc Bolland said: "In this challenging economic environment, more customers than ever before are choosing Morrisons."

Like-for-like sales including fuel for the 13-week period to November 2 rose 13.3 per cent.

The sales hike builds on a 7.6 per cent rise seen in the first half of its year as cash-strapped shoppers search around for the best deals.

"The economic environment is difficult and will remain challenging, but we have confidence in the strength of our value proposition," said Mr Bolland.

"Performance in the third quarter has been solid and our financial expectations for the current year remain unchanged."

The company has also announced that it has agreed to buy 38 former Somerfield and Co-operative food stores for 223 million. It said that the stores will "fit very well" within its existing portfolio of 150 smaller stores.

The acquisition will go through once the Co-op's takeover of Somerfield is complete, with the six-month store handover expected to start early next year.

While Morrisons has continued to see strong spending growth, Marks & Spencer is understood to have seen sales of clothing, wine and home products tumble by 19 per cent in the week to November 29. Like-for-like sales of general merchandise are also reported to have dipped by 15 per cent.

The retailer was today set to hold a second '20 per cent off' sale in a bid to lure customers.