[ad_1]
Wm Morrison revealed a fall in group sales in the second half of the year as the latest industry data suggested most food retailers had endured difficult conditions in the all-important festive trading period.
The Bradford-based supermarket chain said group sales were down 1.7 per cent on a same-store basis in the 22 weeks to January 5. It did not provide figures for the Christmas period in isolation, but house broker Shore Capital estimated sales fell by 2.5 per cent, against the 3.6 per cent growth reported in the equivalent period last year.
Nielsen market share figures also released on Tuesday showed grocery sales had grown by just 0.5 per cent over the four weeks leading up to Christmas — the slowest pace in five years.
Morrisons’ chief executive David Potts said the period had begun well but became increasingly promotional during the autumn. Morrisons had not discounted as much as in the past — but had failed to offset that with full-price sales.
“In previous years we have used Black Friday as a springboard into Christmas but we held back from that this year. When we talk in the statement about learnings, that’s one of the things we’ll reflect on,” Mr Potts told reporters on a conference call. “We missed it a bit more than we replaced it.”
“We always say that Christmas comes a bit later every year but that didn’t happen as much this year,” added the chief executive, although he played down the impact of the December general election on sales.
Mr Potts said there was a sense of greater optimism since the election but that had not yet shown up in the numbers. He added that Brexit would need to be fully resolved for customer confidence to return in earnest.
Although Morrisons said it expected underlying profit to be in line with analyst forecasts for the year to January, Shore cut its own forecast by 1.7 per cent and trimmed 3.5 per cent off its 2021 estimate.
However, Morrisons’ shares were up 3 per cent in early London trading, reflecting the fact that the decline in same-store sales in the second half was less than the 2.2 per cent expected by analysts.
James Grzinic at Jefferies said the company’s ability to increase margins even as sales dipped showed there was “sizeable self-help potential” within the business.
Sales at the UK’s fourth-largest grocer have been losing momentum since the summer of 2018, when the football World Cup and warm weather boosted sales across the industry.
Growth in Morrisons’ wholesale operation, which supplies convenience group McColl’s and petrol station operators, has also slowed. In the third quarter to November 5, which was also reported on Tuesday, sales were down 0.1 per cent. The company said it had been hit by lower total sales at McColl’s.
Morrisons’ most recent performance is a stark contrast with Aldi, which on Monday reported that sales had grown 7.9 per cent in total over the four weeks to Christmas Eve, although it did not provide a same-store sales figure and its headline growth rate was slower than in previous years.
Nielsen’s figures showed all the major chains losing market share and sales. Co-op, Iceland, Marks and Spencer and the German discounters Aldi and Lidl increased sales. Lidl was the top performer, increasing sales by 12.2 per cent against the same period a year ago on Nielsen data.
[ad_2]
READ SOURCE
