Morrisons ‘pleased’ as LFL sales rise

Morrisons has recorded its third consecutive quarter of growth as like-for-like sales rose by two per cent during Q2.

The retailer said like-for-like sales also grew by 1.4 per cent during the first half of the year, as it published results for the half year to 31 July 2016.

Total turnover dipped by 0.4 per cent to £8.03 billion, but the retailer said it has improved the customer shopping trip and stablised LFL sales.

Other notable milestones included selling its stake in the US online retailer Fresh Direct, and new partnerships with Amazon, Timpson and Ocado.

Chairman Andrew Higginson said the new team has “made a real difference” and delivered good progress across the board in the first half. “Prices are lower, customers are being served better and quality is improving, as demonstrated by Morrisons winning a number of recent prestigious awards such as the 2016 Meat and Fish Retailer of the Year. We remain on track to deliver improved profits and returns for shareholders,” he said.

Chief executive David Potts said: “We are pleased with positive like-for-like sales and 11 per cent underlying profit growth in the first half. Our priorities are unchanged. We have made improvements to the shopping trip for customers and we plan to do more.

“I would like to thank the entire Morrisons team of food makers and shopkeepers who are working very hard to Fix, Rebuild and Grow Morrisons. This turnaround opportunity is in our own hands and I am confident we will succeed,” he added.

Potts said it is too early to tell how the referendum result could affect the British economy, but shoppers have said their food shopping has not changed. “We have seen no negative impact on customer sentiment or customer behaviour,” he said. “There are some uncertainties, especially around the impact on imported food prices if sterling stays at its current lower level. However, our priorities are unchanged, and we will continue to invest in becoming more competitive and improving the shopping trip for customers.

“During the first half, we achieved the first £5m of incremental profit from wholesale, services, interest and online, and remain confident of our £50m-£100m medium-term target.

Potts said Morrisons has identified “further productivity opportunities”, in areas such as product ordering, distribution and in-store administration.