Supermarket giant Morrisons has chalked up a further rise in sales over the latest quarter as it seeks to shake off competition from rivals Aldi and Lidl.
The Bradford-based supermarket chain said it recorded a “solid quarter of progress” in the period from January 29 to April 28, saying it had been boosted by a great start to its Aldi and Lidl Price Match scheme, which was launched in February. During the period like-for-like sales, excluding fuel and VAT, grew by 4.1%, although that figure is slower than the slowdown on the 4.6% increase posted in the previous quarter.
Underlying earnings, excluding fuel, increased by £321m for the first half of its financial year amid a boost from its cost-cutting programme. Morrisons acquired 38 convenience stores in the Channel Islands from SandpiperCI in the quarter, and it said it has also completed the conversion of the acquired McColl’s stores. It has also now set a target of having 2,000 Morrisons Daily convenience stores across the UK in 2025.
Rami Baitieh, chief executive of Morrisons, said: “I am pleased with the overall performance of the business in the second quarter with supermarkets, convenience, wholesale and online all delivering growth and contributing to a 4.1% increase in like-for-like sales.
“Over the last eight months we have listened carefully to over 340,000 customers, colleagues and suppliers and the insights from this exercise are helping to refine and shape the activity in all three pillars of our strategy: commercial excellence, operations optimisation and new value creation. It’s clear that availability and our loyalty scheme are the two areas our customers talk about the most and so we are focusing intensively on these areas.
“Our Aldi and Lidl Price Match, introduced in February, has had a great start and is giving customers increasing confidence in the competitiveness of our prices across the shop.
“Convenience remains an important and strongly growing channel for us. With the McColl’s conversion programme now complete and the recent acquisition of 38 stores in the Channel Islands, we have over 1,600 Morrisons Daily convenience stores across the country, about two thirds of which are wholly owned. With this strong growth trajectory we are now targeting a total of 2,000 convenience stores in 2025.
The group also reported that it has reduced its significant debt burden.
Jo Goff, chief financial officer, said: “This has been another solid quarter of progress with sales and volume improvements right across the business. Our debt has now reduced by over a third and we made further progress on our cost savings programme with £78m delivered in the quarter, taking the total since the start of this year to just over £450m, in line with our £700m three year target.”
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