Morrisons shares fall despite Christmas sales growth

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Morrisons
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Supermarket chain Morrisons has announced that their Christmas trading came in slightly behind consensus forecasts, as a 3.6% increase in like-for-like sales was slower than in recent updates.

Retail contributed 0.6% to group like-for-like (LFL) sales, with Wholesale accounting for 3%.

Following the announcement, the shares fell 3% in early trading.

This news is a stark comparison to the discount supermarket stores, such as Aldi, who announced record sales of almost £1bn earlier this week.

Chief Executive David Potts commented: “This is Morrisons fourth consecutive Christmas of like for like sales growth during the turnaround. Our performance shows colleagues are listening hard and responding to customers, providing consistently great value and good quality when it matters most. I would once again like to thank the whole Morrisons team for what they continue to do for our customers. Morrisons is well set to keep improving the shopping trip and become more and more relevant for more customers”.

Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown said: “These numbers aren’t a bad showing by Morrison, but they’re shy of being excellent news. It looks like consumers reigned in spending during the festive period, and for Morrison that meant a slow-down in sales growth.

“That comes as rival Aldi announced yesterday it enjoyed its best ever Christmas, with sales improving 10% on last year. That was either a sign figures were going to shine for all the supermarkets this season, or that German discount stores were stealing market share. It now looks like the latter may be true.

“It’s not all bad news, Morrison has done well to achieve positive sales growth for a fourth consecutive Christmas. The fact remains though that sales are looking more and more like they need a shot in the arm. With the potential merger of Sainsbury’s and Asda on the horizon too, Morrison will need to stop the chill on the tills turning into a deep-freeze.”

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