Price cutting helps push sales higher at Morrisons

Robyn Ryan
May 6, 2017

Morrisons said that its comparable sales were on the up because more customers were using its shops more often as it lowered prices and improved the range of...

A strong performance across Valentine's Day, Mother's Day and Easter has helped Morrisons drive up first quarter sales.

Potts, a former Tesco executive hired in 2015 to revive Morrisons' fortunes, said it was making strides online, in wholesale and in services.

Clive Black, of analyst Shore Capital, said the trading update brought "further welcome and reassuringly good news from the company", with its sixth quarter of positive like-for-like sales.

Inflation caused by a diminished sterling and increased import prices was cited as a challenge, but the report highlighted the group's resilience through the release of additional "Price Crunch" discounts launched earlier this week.

Morrisons boss David Potts was hailed for spearheading a "stunning turnaround" as it boasted a sales rise of 3.4pc.

Total sales, excluding fuel, rose 2.8 per cent, reflecting the impact of last year's store closures.

Mr Potts added: "We've been working hard to improve quality and lower prices".

The Bradford, northern England, based company also said on Thursday that its expectations and guidance for the 2017-18 year were unchanged.

The Morrisons at Amazon business has also grown, with the same-day and one-hour delivery service recently extended into more London postcodes.

Interestingly, in times of consumer uncertainty, rising prices and belt tightening among shoppers, Morrisons has benefited from expanding its premium and healthier eating private label ranges. Customers are flocking back, and like-for-like sales growth is trending strongly upwards. "Irrespective of these external pressures, we remain focused on the journey towards a Morrisons price list and becoming more competitive for customers".

In food, it introduced a new online and in-store "Food to Order" offer for Spring/Summer, enabling customers to pre-order for parties or other special events all year round.

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