Shares in Morrisons, the UK’s fourth-largest grocer, rose this morning (5 May) after the company reported first-quarter sales that beat analyst estimates.
The company booked a 2.5% increase in like-for-like sales, excluding fuel, for the 13 weeks to 1 May.
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RBS analyst Justin Scarborough said the City had a consensus forecast that Morrisons like-for-likes, excluding fuel, would rise by 1.3-1.5% – although he said the bank had expected growth of 2-2.5%.
He added: “Given that 21% of Morrisons sales are generated from fuel then we should not ignore the 5.8% lfl sales growth including fuel in the period, which together with the new space contribution, shows that Morrisons customers spent 7.3% more in 1Q than they did in the same period of last year.”
Total sales, excluding fuel, were up 4.2% and Morrisons said its sales growth was “continuing ahead of the market”.
The retailer also said it had attracted “record” numbers of customers through its “innovative promotional programme”, which included the “Biggest Ever Price Crunch” and “Fuel Britannia” campaigns, as well as “Let’s Celebrate” for Easter and the Royal Wedding.
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By GlobalDataMorrisons said it had been “encouraged” by its first quarter but admitted it was “cautious” about the year ahead due to falling disposable incomes and economic uncertainty in the UK.
Scarborough said the “headwind” of lapping the 2010 football World Cup, plus “fragile” UK consumers continuing to search for value, meant that RBS expected Morrisons second-quarter sales to “trend lower” than the first quarter.
Nevertheless, shares in Morrisons were up 0.8% at 302.7p at 09:48 BST this morning.
