Morrisons notches up more sales growth

Morrisons, the UK’s fourth-biggest supermarket chain, has reported a 2.5% rise in sales for the third quarter.

The rise in like-for-like sales, which measures activity in stores that have been open for more than a year, shows the retailer’s recovery is continuing. Sales at the supermarket have now grown for eight quarters in a row. Chief executive David Potts, said:

We again worked hard during the quarter… and made good progress on becoming more competitive.

While the sales increase in the three months to 29 October is another step forward in Morrisons’ recovery, it is a notch below the 2.6% rise in the previous quarter and is also down on the 3.4% rate seen in the first quarter of this year. Morrisons has been the best performing of the established “Big Four” UK supermarkets recently, although all chains are attempting to fight off the fierce competition coming from discounters Aldi and Lidl. One area earmarked for growth is its higher-quality “Best” range. Mr Potts said this was being increased to 1,000 items and would have double the range of items offered this Christmas, compared with last.

Morrisons is also expanding its home delivery services. It now has partnerships with both internet giant Amazon, which in certain areas will deliver an entire shopping basket, and home delivery specialists Ocado. Ocado, which initially served only Waitrose customers, now delivers orders from the Morrisons.com website to half the country. Morrisons has been unable to service the North East from Ocado’s site in Warwickshire, but it has now launched a delivery service in the region. It also plans to roll out deliveries to areas in the south of England that it does not already serve. Tom Berry, retail analyst at Global Data, said the company’s recovery drive was bearing fruit:

The continued drive to improve quality and affordability has paid off for Morrisons, as it fends off competition from the discounters and capitalises on Asda’s failure to implement a clear turnaround strategy.

However, he said maintaining the pace of growth could get tougher.