A new wonky veg brand and the start of a partnership with convenience chain McColl’s have contributed to Morrisons' 10th consecutive quarter of growth.
The UK’s fourth largest supermarket chain saw its like-for-like sales, excluding fuel, increase by 3.6 per cent in the 13 weeks to 6 May, with its retail and wholesale operations both contributing growth of 1.8 per cent.
Morrisons attributed some of its sales success to its new ‘Wonky’ brand of low-priced, out-of-spec fresh produce, which has helped to minimise waste and ensure more of the crop is used.
“We continued to invest in the customer shopping trip, and again improved our competitiveness,” the retailer added. “Inflation was broadly flat and volume growth accelerated during the period.”
In addition, Morrisons opened two new stores during the first quarter – in Abergavenny, Wales and in St Ives near Cambridge. “Both have had a strong start and the feedback from customers has been excellent,” the supermarket chain reported.
Morrisons’ chief executive David Potts said: “We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth. We expect to continue to improve in the year ahead.
“During a busy period of exciting new ranges, new store openings, strong supermarket and wholesale growth, and the peaks and troughs of the seasons, our colleagues once again did an outstanding job for customers.”
It was not all good news, however, with growth in the number of like-for-like transactions continuing to slow, up 0.7 per cent in the first quarter of 2018 compared to a rise of 4.6 per cent in the same period last year.
Furthermore, the number of like-for-like items per basket fell by 1.1 per cent, however this was a slower decrease than in previous quarters.
On the wholesale side of the business, Morrisons started supplying convenience chain McColl’s, through a rolling programme of around 25 stores per week during the first quarter. These stores receive a full fresh, frozen and ambient offer from Morrisons, including brands and the new Safeway range.
The supermarket chain’s wholesale supply operations contributed 1.8 per cent growth to the group’s total like-for-like sales, with the supermarket saying it was on track to achieve its target of £700m of annualised sales by the end of the year and £1 billion in due course.
The company did not mention the potential merger between Sainsbury's and Asda in its first quarter trading statement, however one analyst has suggested that Amazon could buy Morrisons as it looks to make further inroads into the UK groceries market.
Bryan Roberts, global insight director at marketing firm TCCGlobal, told The Independent: “Looking ahead, a takeover bid from Amazon is not beyond the realms of possibility.”
