Morrisons reports improved Christmas trading
Morrisons has reported that like-for-like sales excluding fuel edged up 0.2% in the nine weeks to 3 January as customers responded to an improved shopping trip at its supermarkets.
Total sales excluding fuel fell by 1.2% while the sales contribution from net new space was negative, as expected, following the recent disposal of 140 M local stores and previously announced supermarket closures.
In a statement Morrisons said: “We are working at pace to improve all aspects of the shopping trip and customer satisfaction levels remain significantly ahead of last year. We are beginning to attract customers back to Morrisons, with the like-for-like number of transactions up 1.3% year-on-year in our core supermarkets. In addition, online sales grew nearly 100% year-on-year.”
It added: “This year, we traded without the 'Christmas Collector' scheme and with a greater focus on everyday value, running less multi-save promotions and providing bigger packs with better value. In addition, we saw strong like-for-likes in premium products and a successful category reset in beers, wines & spirits. All this meant better value and an improved shopping trip for customers, but it did impact items per basket.”
The supermarket said it was continuing to focus on simplifying and speeding up the business. Around 800 head office roles have been removed since the start of 2015/16. It is also bringing some teams, such as maintenance, in house.
As part of ongoing plans to optimise assets and address areas of underperformance, Morrisons has also announced that it is to enter into consultation to close a further seven supermarkets although there are no plans for any further closures.
David Potts, Morrisons chief executive, said: "We are pleased with our improved trading performance over the Christmas period. While there is of course much more to do, we are making important progress in improving all aspects of the shopping trip, and our customers tell us they are pleased with the changes. In addition, we have made further progress in debt reduction, and our financial position is strong and getting stronger.”
Morrisons expects to incur head office restructuring and store closure costs of £60 million which is at the upper end of the previously guided £50 million to £60 million range, after incorporating the costs relating to the proposed store closures.
The supermarket still expects underlying pre-tax profit to be higher in the second half of 2015/16 than in the first. It anticipates that full year 2015/16 underlying pre-tax profit will be in the range of £295 million to £310 million before the £60 million restructuring and store closure costs.
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