Morrisons unwraps surprise rise in festive sales

Morrisons has said that it is winning back customers, reporting an unexpected rise in festive sales after its best Christmas for four years.

Morrisons enjoyed a better-than-expected performance over the festive season. Picture: Lisa Ferguson

The grocery giant said like-for-like sales excluding fuel rose 0.2 per cent in the nine weeks to 3 January, as it continued to cut prices, in sharp contrast to the 2 per cent drop predicted by analysts.

Figures for the six weeks to 3 January showed an even better performance, with like-for-like sales excluding fuel up 0.5 per cent.

The group said it is to shutter a further seven stores as it pursues its focus on “optimising our assets and addressing areas of underperformance to improve returns”. However it stressed that it has no more planned closures lined up and comes after the sale of 140 convenience stores announced in September.

Chief executive David Potts said: “We are pleased with our improved trading performance over the Christmas period. While there is of course much more to do, we are making important progress.”

Morrisons said it expects its full-year 2015-16 underlying pre-tax profit to be in the range of £295 million to £310m. Analysts at Shore Capital described the latest trading figures as “especially encouraging,” adding: “We believe that this update has the basis to be the most surprisingly positive trading statement over the festive period in UK retailing.”

Tesco is due to deliver a trading update tomorrow, while Sainsbury’s today reported a dip in festive sales.

Meanwhile, the mixed fortunes of the grocery market were highlighted yesterday in data published by Kantar Worldpanel. It found that overall sales fell by 0.2 per cent from a year ago for the 12 weeks ending 3 January.

Morrisons’ share of till spend declined by 2.6 per cent to 11 per cent and Tesco saw its share fall by 2.7 per cent to 28.3 per cent.

It was better news for Sainsbury’s which experienced growth of 0.8 per cent to reach 17 per cent.

Kantar also noted the impact of the discounters, and its head of retail and consumer insight Fraser McKevitt said: “The discounters are continuing to establish themselves in the minds of British consumers – almost one in eight did their single biggest December shopping trip in Aldi or Lidl, on top of the 15.6 million households who visited at some point in the 12 weeks.”

Howevere, Kantar also noted that total discounter share dropped from the 10 per cent achieved before Christmas.