Morrisons has reported its strongest sales growth for more than a year, as the debt-laden supermarket group’s turnaround strategy begins to deliver stronger trading momentum.
The Bradford-based retailer said like-for-like group sales rose 3.2 per cent in the 13 weeks to July 26 compared with the same period a year earlier. Total sales reached £4.1bn during the quarter.
The performance was supported by hot weather and the World Cup, while Morrisons said its investment in pricing was helping to increase sales volumes. Online sales also recorded double-digit growth during the period.
Rami Baitieh, chief executive, described trading as “robust” and said the group had outperformed the wider UK grocery market following investment aimed at improving its price competitiveness.
The private equity-owned supermarket said lower prices had contributed to higher volumes, while its convenience operation continued to expand.
Morrisons has opened 71 new Morrisons Daily franchise stores so far this year and said it planned to add “hundreds more” over the coming years.
The expansion forms part of a broader effort to rebuild the retailer’s position in the highly competitive UK grocery market, where supermarkets have faced persistent pressure over pricing, wages and operating costs.
The company also reported further progress on its cost-reduction programme. Morrisons delivered approximately £53m of additional savings during the latest quarter, taking cumulative savings since the turnaround began to almost £1bn.
Management said it had made a “good start” to the current quarter and was “well-prepared” for Halloween, suggesting that the stronger momentum seen during the latest reporting period had continued beyond July.
Baitieh said the improvement was broad-based across the business.
“Our stronger sales momentum reflected a broad-based improvement across the business – with our supermarkets, online, convenience, pharmacy and Myton manufacturing businesses all reporting good growth, underlining our progress with our plans to renew and modernise Morrisons.
“We are pleased with our third quarter performance.
“Our stronger like-for-like sales, the combination of lower prices and volume growth, and our market share improvement, are all clear evidence that our strategy is delivering and that we remain on track with our plans.”
Morrisons’ stronger performance comes as the UK grocery sector remains intensely competitive, with consumers continuing to balance household budgets against persistent cost pressures.
For Morrisons, the combination of lower prices and higher volumes is particularly important as it seeks to rebuild sales while simultaneously reducing costs and managing a substantial debt burden.
The latest figures suggest the retailer is making progress on both fronts, although sustaining sales momentum while funding further price investment will remain central to the next phase of its turnaround.
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