Morrisons has reported a rise in sales over the Christmas period, as strong figures from the supermarket’s wholesale arm offset sluggish retail growth.
In a trading update, Morrisons reported that group like-for-like sales excluding fuel rose by 3.6 per cent for the nine weeks to 6 January, driven largely by a 3 per cent rise from its wholesale offering.
The wholesale division, which includes tie-ups with McColl’s and Amazon, grew by just 0.7 per cent in the comparable period last year.
Retail sales increased by 0.6 per cent over the festive spell, marking a slowdown on the 2.1 per cent growth seen the year before.
Morrisons said its full-year outlook remains unchanged but did warn of a “change in consumer behaviour”.
Chief executive David Potts said: “This is Morrisons’ fourth consecutive Christmas of like-for-like sales growth during the turnaround.
“Our performance shows colleagues are listening hard and responding to customers, providing consistently great value and good quality when it matters most.
“Morrisons is well set to keep improving the shopping trip and become more and more relevant for more customers.”
The group cited customer satisfaction as an “important measure” of its turnaround progress.
Analysts said the supermarket had delivered good results in a competitive market, but still faced threats from larger rivals, discount supermarkets and online offerings.
Morrisons has this week joined peers in slashing prices as established retailers compete with discounters Aldi and Lidl.
John Moore, senior investment manager at Brewin Dolphin Scotland, said: “The expectation was that this would be a tough festive period for retailers and, by association, for Morrisons; but it has posted a resilient set of figures in a highly competitive market.
“The supermarket pointed to improvements in customer satisfaction as an indicator of the success of its turnaround, which validates the financial investment and redoubled effort that the management team has put in over the last year; but the proof of the Christmas pudding is in its resilient financial performance.
“All eyes will now be on Sainsbury’s and Tesco’s results, which are also due to report this week.”
Sainsbury is scheduled to update the market tomorrow and Tesco on Thursday.
Richard Hunter, head of markets at Interactive Investor, said the figures showed Morrisons was “in good shape”.
However, he added: “Pressure remains on all sides. A resurgent Tesco, the proposed Asda/Sainsbury’s alliance and the continuing advance of Aldi and Lidl (the former of which just announced its best-ever Christmas) all add to a challenging environment.
“Meanwhile, whilst improved, Morrisons still lags in comparison to its larger rivals in the increasingly important channels of online and convenience stores.
“In addition, the figures overall are shy both of analyst expectations as well as the same period last year.
“On the whole, however, Morrisons has a plan and is beginning to deliver it.”