Morrisons reveal strong Christmas trading performance

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Morrisons

The UK’s fourth largest supermarket chain Morrisons have released their Christmas trading statement, revealing strong performance in 2020.

The release revealed that like for like sales (excluding fuel) across the Christmas and New Year period improved to 9.3%. These figures were up 8.1% in the 22 weeks to 3rd January, with increases being driven by retail.

David Potts, Chief Executive, said: “The pandemic has had a severe effect on people and communities around Britain for nine months now but it has been especially hard at Christmas time.

“I’m very pleased with the way the Morrisons team has helped our customers across the nation enjoy their Christmas in the best way they could – with safe shopping, great service and outstanding stores even in the most difficult circumstances. But I’m even more proud of the broader contribution that the Morrisons team has made to the communities we serve – through foodbank donations, doorstep deliveries to the vulnerable, discounts for key workers, the work of our 500 community champions and the countless small acts of kindness that have made a particular difference this year.

“We will carry on listening, responding and growing, and take all the positive learnings and momentum of the most challenging of years into what we believe will be a better 2021 for all.

“I would like once again to thank everyone at Morrisons for their hard work, dedication and resourcefulness under the most testing and extreme conditions, which has been inspirational even beyond this business and the stakeholders we serve.”

Industry Reaction

Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown said: “Christmas get togethers may have been smaller, but that didn’t stop us making the most of festivities. Sales of champagne and salmon swam decidedly upstream over Christmas this year, helping the likes of Morrison’s record some healthy sales figures. More important than the ringing of the tills though, is the group’s mention of improving customer and brand metrics. In the highly competitive realm of the Big Four, this is a significant milestone for the supermarket chain.

“Morrison’s is an underdog in some ways, especially when looking at the online business, which is smaller than some rivals. The pandemic has given the group a chance to address this, and digital sales have more than tripled so far this quarter. Starting from a lower base means there’s more room for exceptional growth, but the question now is if Morrison’s can keep a firm grasp on that momentum, and push growth long and hard enough to give its competitors something to worry about.

“Sales growth is coming from the pile it high, sell it cheap mentality. Cutting prices isn’t a new tactic, and in some respects a volume-led approach is often desirable. But it’s a method that requires a high number of sales, or margins will suffer. As the vaccine roll-out continues and shopping habits potentially start to temper later this year, lower prices could put a lid on profit potential. With the recent sale of Asda and an all-round uber-competitive environment, it’s unlikely pricing pressure is going to ease.”

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