Coronavirus: Morrisons pleads with panic-buying shoppers as stockpiling provides sales boost

David Potts is the chief executive of supermarket giant Morrisons.David Potts is the chief executive of supermarket giant Morrisons.
David Potts is the chief executive of supermarket giant Morrisons. | Other 3rd Party
Supermarket major Morrisons has revealed a leap in sales amid the recent panic stockpiling as it pleaded with shoppers to “just buy what we need”.

The group said like-for-like retail sales had jumped 5 per cent in the six weeks since its year-end. This marks a significant turnaround on the 1.4 per cent drop seen in the year to 2 February, and a 2.2 per cent drop in the final quarter as the sector was impacted by Brexit and general election uncertainty.

The coronavirus-related update came just a day after the firm outlined plans to hire 3,500 staff and ramp up its online operations to help meet the spike in delivery demand.

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Chief executive David Potts said the group was facing up to the current challenges, but made a plea to shoppers to be considerate as he admitted there were signs of some strain in the supply chain due to “considerable” stockpiling.

The grocery giant has already rationed purchases per customer transaction on 1,250 items, such as toilet roll, cleaning products and some health and beauty ranges.

Potts said: “If we just buy what we need then there will be enough. It’s inevitable there is and will be strain in the further reaches of the supply chain.”

His comments came as the group posted full-year underlying pre-tax profits up 3 per cent to £408 million, with shares rising despite a decision not to pay a final special dividend payout due to current uncertainty amid the Covid-19 crisis.

Potts said the group was increasing the food it makes to help meet demand, while its home delivery expansion plans will increase delivery service by 60 per cent.

In a joint statement, Potts and chairman Andrew Higginson said: “We are currently facing unprecedented challenges and uncertainty dealing with Covid-19.

“Looking after our colleagues and customers is our priority, ensuring that we have a clean, safe place to shop and work.”

The group also revealed it has 83 teams installing protective screens to all of its checkouts across the chain to help protect staff from coronavirus.

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Richard Hunter, head of markets at Interactive Investor, said: “Morrisons has been focused on honing its financial health and the positive results are beginning to materialise.

“There is little question that the group finds itself in a strong balance sheet position, with its store portfolio 87 per cent freehold, free cash flow of around £300m and currently running a pension surplus.

“In addition, the decision to defer the special dividend is a prudent one, which will allow Morrisons extra flexibility in allocating its cash in these trying times.”

Analysts at Shore Capital noted: “The group is doing what we believe is the right thing for the nation in this Covid-19 time for its small suppliers, its customers, especially for home shopping, and colleagues, particularly those that maybe facing specific challenges.

“Morrisons is currently something of an oasis for equity investors. [The group] has a strong financial constitution and current trade is materially more robust. Morrisons is well placed to not just meet the challenge of the near-term but flourish in the long-term too.”

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