Two years of remarkable growth at Morrisons have been curtailed and poor sales were attributed to falling food price inflation as well as wider market slowdown in its latest trading update.
The supermarket reported its weakest quarterly sales uplift in five years, posting a like-for-like sales increase of 0.8 per cent, excluding VAT and fuel, in the 13 weeks to 2 May.
Total first quarter sales were up 5.9 per cent, or 9.5 per cent when fuel is included, illustrating the steep climbs in these prices compared to a year earlier.
During the quarter, Dalton Philips joined the company as chief executive and said to be “currently familiarising himself with the group’s operations”.
The firm said it had built on its strong same-store rises over the previous three years but the figures look poor in comparison to a rise of 4.8 per cent in the previous quarter.
The Bradford-based retailer said slowing commodity prices had almost removed food inflation from the figures and caused lower market growth, adding it was "satisfied" with the sales performance.
Morrisons said it continued to outpace the market, growing its share despite the anticipated slowdown in growth.
Finance director Richard Pennycook told the Financial Times: “What we can see from Kantar data is total market growth of 1.3 per cent and space growth of three per cent for the industry. That tells you that there are a lot of negative like-for-likes out there. Our sense is that we are ahead by a nose.
“Retailers face an election every day. At the moment we are just ahead of the opposition."
In a statement the supermarket said: “Although we remain cautious on the economic environment and consumer spending, our expectations for the current year remain unchanged.”
No comments yet