Morrisons’ underlying sales growth improved in its fourth quarter, which it said reflected better product availability, sharper prices, more effective promotions and a growing loyalty scheme.
The UK’s fifth-largest supermarket group – which has been owned by US private equity firm Clayton, Dubilier & Rice since 2021 – said on Wednesday that its like-for-like sales rose 4.9% in its fourth quarter on 27 October.
The retailer previously reported that like-for-like sales were up 2.9% in its third quarter.
Morrisons said the quarter was its strongest since the start of 2021.
The update did not cover the run-up to Christmas.
‘Urgent Reinvigoration’
Earlier this month, industry data showed Morrisons underperforming compared to the sales growth of UK market leader Tesco and number-two retailer Sainsburys, as well as discounters Aldi and Lidl, in the holiday period.
The data from researcher Kantar showed Morrisons’ sales up 0.4% in the 12 weeks to 29 December, ending 2024 with a UK grocery market share of 8.6%.
This was down 20 basis points on the year.
Former Carrefour boss Rami Baitieh joined Morrisons as CEO in November 2023, and last January he said the retailer’s performance was not good enough.
His turnaround strategy has focused on improving the retailer’s price competitiveness, product availability and its “More Card” loyalty programme.
The retailer introduced a scheme to price match Aldi and Lidl on key items in February.
Analysts said that since CD&R bought the company, Morrisons has been hamstrung by debt, which the retailer said was £4.0 billion at the end of October, down from a peak of £6.2 billion.
Morrisons said core earnings, or underlying earnings before interest, tax, depreciation and amortisation (EBITDA), its preferred metric, rose 11.2% to £835 million in the year, on revenue up 3.8% to £15.3 billion.
Baitieh said, “This has been a year of urgent reinvigoration and positive progress for Morrisons.”
Cyber Attack
The supermarket group added on Wednesday that a November cyber-attack at technology provider Blue Yonder hit its product availability, impacting Christmas sales.
Baitieh told reporters, “Our warehouse management system had to be shut down, leaving us without visibility on our fresh and produce stock levels for several days.”
Finance chief Jo Goff said Morrisons did not see sales growth in the first quarter to the end of January, but it was lower than the 4.9% reported for the previous quarter.
Read More: UK Consumer Morale Sinks To Lowest Since Late 2023 – GfK
