Supermarket chain Wm Morrison Supermarkets has announced a rise in like for like sales for its continuing business of 5% or 2.6% excluding fuel for the half year ended 24 July (25 weeks).
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Stores now converted to Morrisons (from Safeway) increased sales by 11.6% or 10.9% excluding fuel. However these figures include any “unconverted period” during the half year and, when this unconverted period is excluded, converted stores like-for-like sales increased by 15.7% or 15.6% excluding fuel. This sales uplift is driven by customer numbers increasing by 23.2% post conversion.
Continuing Safeway stores awaiting conversion traded positively with like-for-like sales increasing by 3.9% or 3.4% excluding fuel.
Like-for-like sales in the core Morrison estate increased by 1.1% but excluding fuel were down 2.7% as stores adjusted to the one-time impact of Safeway stores sold to competitors resulting from undertakings given to the Office of Fair Trading as part of the Safeway acquisition. There was also some cannibalisation of sales resulting from Safeway stores converting to Morrisons.
Group sales, on a statutory accounting basis, were £6.363bn, an increase of 3% influenced by an extra 5 weeks contribution from Safeway stores. On a strictly comparable 25 week basis, sales decreased by 7.4% reflecting primarily the sale of 181 stores over the past year.
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By GlobalDataAt the half-year end 148 former Safeway stores had been converted to Morrisons and there were 280 stores successfully operating to the Morrisons format.
We remain on track to complete the accelerated conversion process by late November 2005 by which time 360 stores across the UK will be trading as Morrisons, the company said. This group of stores will comprise over 10m square feet of selling space, averaging 28,500 square feet store with a 92% freehold content.
In 2006 and 2007 we will focus our attention on the optimisation of the remodelled and much larger Morrisons store portfolio we have created through a period of immense change, the company said.
A number of contracts to dispose of former Safeway stores are at various stages of the legal process. These are stores which would not successfully carry the Morrisons brand and generally are leasehold and fully rented.
New stores have been successfully opened this year in Scotland – at Hamilton and Auchinlea (Glasgow). There are 5 further new openings in the second half of the year – 3 more in Scotland and 2 in southern England. Major extensions are being added to stores at Coventry and Hinckley – 4 other major extensions having been completed in the first half of the year.
