Scots lead way with surge in sales at Morrisons

SCOTLAND is again expected to set the pace on sales growth for Morrisons when the supermarket giant unveils its full-year results this week.

At the halfway stage, the Scottish market and the south of England outperformed for the group, whose heartland is the north of England, and analysts expect this to be repeated over the full year.

Like-for-like sales at the group – whose new chief executive takes over later this month – rose 7.8 per cent in the six months to 2 August. But the company also revealed Scotland and the south of England had seen double-digit growth.

One analyst said: "My guess is that outperformance in the new regions Morrisons entered with the acquisition of Safeway (in 2003] will continue.

"The recession is unlikely to have affected that Scottish outperformance in the back end of 2009. The same applies to the south of England."

Sales at some converted stores bought from the Co-op were about 50 per cent ahead at halfway stage.

The City consensus forecast for full-year turnover and pre-tax profits at Morrisons, where Dalton Philips was recently appointed chief executive-designate, is 15.5 billion and 757million respectively. The consensus for Morrisons' annual like-for-like sales growth, excluding fuel, is 6 per cent.

Philips will not take Thursday's City results presentation, which will be handled by chairman Sir Ian Gibson and finance director Richard Pennycook.

Pennycook had been one of the leading candidates for the chief executive's role once Marc Bolland was poached by Marks & Spencer late last year.

Instead it went to Philips, the 41-year-old chief operating officer of Loblaw, one of Canada's supermarket majors, which also sells general merchandise and financial products.

Freddie George, retail analyst at broker Seymour Pierce, said: "Given that the new man will not be present at the meeting, it is unlikely Morrisons will have too much to say on strategy. They will probably talk, though, about developing their new convenience stores and new distribution network."

George has pencilled in profits for the year of 745m, compared with 636m last time, and a total dividend of 7p, against 5.8p.

Morrisons will have benefited from strong Christmas trading when its like-for-like sales in the six weeks to 3 January jumped 6.5 per cent. That outstripped like-for-like sales growth of 4.9 per cent at Tesco and 4.2 per cent at Sainsbury's.