Morrisons, the UK’s fourth-largest food retailer, saw its sales growth slow over Christmas in what its chief executive described as a “very tough” market.
The company reported a 0.7% increase in like-for-like sales for the six weeks to 1 January. Total sales were up 2.9%. Morrisons said the result was “in line with the market” in a “challenging Christmas period for the consumer”.
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Chief executive Dalton Philips was “pleased” with Morrisons’ festive period. “I am pleased that in a difficult trading environment we have continued to grow our business and have delivered another good performance in a very tough market,” Philips said.
However, in recent quarters, Morrisons has often been one of the better performers among the UK’s grocers. In November, it reported a 2.4% rise in like-for-like sales for the 13 weeks to 30 October, which was the third quarter of its financial year.
Last week, research firm Nielsen provided its sales data for the four weeks to 24 December and said Morrisons had increased sales over that period by 2.9%.
Shore Capital, which described Morrisons’ sales for the six weeks to 1 January as “disappointing”, said the difference between the retailer’s figures and the Nielsen data to Christmas Eve indicated that trading after Christmas was “subdued at best, in our view, which will have an impact across the sector”.
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By GlobalDataResearch firm Conlumino echoed Shore Capital’s view of Morrisons’ results but emphasised the challenging trading environment in the UK.
Haakon Helgesen, a retail analyst at Conlumino, said: “Given Morrisons’ recent track record, these results show disappointingly slim growth, especially so as comparatives against last year were not particularly tough and Morrisons is not as exposed to the pressurised non-food market as other grocers.
“That said, the figures are indicative of the low growth environment that now characterises UK food retailing which was exacerbated by extensive discounting in the run up to Christmas. Against that backdrop, Morrisons’ numbers are more reasonable and its market share is likely to have remained stable over the festive period.”
Shares in Morrisons dipped in early trading but, by 10:09 GMT, its stock was up 0.84% at 313.9p.
