Morrisons set to continue star form with growth in sales

Published on Sunday 15 November 2009 21:14

MORRISONS will have the chance to show its recent rise was no fluke when it reports its third-quarter sales this week.

The chain has been a star performer in the supermarket sector over the past two years as its value-for-money offer attracts recession-hit consumers.

Morrisons reported same-store sales up 7.8 per cent in the six months to 2 August – up on the 7.3 per cent hike in the first quarter and a figure that left market leader Tesco trailing behind. But the market is shifting as food price inflation falls sharply and as Tesco enjoys a return to form.

Research from TNS Worldpanel recently showed Tesco's takings in the 12 weeks to 5 October were 4.2 per cent above last year as it narrowed the gap with the wider market. While Tesco is beginning to fight back against resurgent middle market rival Sainsbury's, Morrisons is expected to be more resilient.

RBS Equities analyst Justin Scarborough expects Morrisons to still outperform its peers. He said: "Morrisons' third-quarter statement should show food sales progress through a combination of like-for-like sales growth and new space contributions."

Low-cost carrier EasyJet has already signalled it will be one of the few airlines to report a profit this year when it posts figures tomorrow.

The group estimated in July that it would deliver underlying pre-tax profits of between 25 million and 50m for the year to 30 September – in stark contrast with heavy half-year losses by embattled rival British Airways. EasyJet has recently seen an improving trend in passenger numbers and its load factor, which measures how well it can fill its planes.

Analysts at Numis Securities believe the airline is weathering the storm well, predicting underlying profits at the top of its guidance range, at 47.4m.

Car parts and bike chain Halfords, which reports half-year figures on Thursday, is likely to confirm it has secured further benefits from the consumer trends emerging amid the recession.

The group has already shown that it is picking up business from the "make do and mend" attitude, with car maintenance now big business, while hard-up consumers cycling to work and holidaying in the UK have also provided a boost.

Halfords said it expected profits of between 59m and 61m in the six months to 2 October, against profits of 49.1m for the same period last year.

In Scotland, Robert Wiseman Dairies is expected to report strong sales for the six months to 3 October, boosted by investment in the South of England.

Wiseman said last month that sales during the period were 10 per cent ahead of last year, boosted by the opening of its state-of the-art dairy at Bridgwater in Somerset.

On Friday its shares hit an 18-month high on anticipation of strong results, which will be published this morning.

Meanwhile, Lena Wilson will today begin her first visit to the United States as chief executive of Scottish Enterprise. Wilson – who has previously made many trips as head of Scottish Development International – will meet with IBM, Pfizer and Morgan Stanley, as well as Scottish companies already working in the US.

"The US really is the land of opportunity for Scottish companies looking to internationalise," said Wilson, the former chief executive of Scottish Development International.

"We are actively encouraging more Scottish companies to develop the ambition to work overseas, and through Scottish Development International we have an excellent range of products and services to help them to achieve this."