Morrisons reports best Christmas in seven years

British supermarket chain Morrisons has reported its strongest Christmas period in seven years, with LFL sales up 3%, total sales up 2%, and LFL transactions increasing 5.2% year-on-year. The firm now expects to deliver pre-tax profit of between £330-£340m.

The UK's fourth largest supermarket says its growth was achieved by becoming more competitive, serving customers better, and improving the offer at its stores. 

"Fresh categories such as Fruit & Veg, together with Beers, Wines & Spirits, 'Best' and Nutmeg clothing all performed well. Our performance shows that when we improve the shopping trip, customers respond." 

The Group says customer service has been central to its turnaround, with service standards at checkouts and the shop floor improving, and Morrisons.com enjoying its biggest ever week for sales over the holiday period. 

Morrisons has introduced new automated ordering systems in its Grocery and Fresh categories, which utilises cloud technology and store-specific sales data to forecast stock requirements, saving time and making stock levels far more efficient.

The firm says it now expects 2016/17 underlying pre-tax profit to be ahead of consensus, between £330m and £340m, marginally higher than its previous guidance of £326m. Management expects to finish the year with net debt of c.£1.2bn.

CEO David Potts said it had been a "very encouraging" period, with like-for-like sales and total sales increasing:

"This Christmas we made further improvements to the customer shopping trip. We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system...

 

"Eighteen months ago I said that this would be a colleague-led turnaround, and our improving performance is entirely due to the continuing hard work of the Morrisons team of food makers and shopkeepers."

Shares in Morrisons rose 4% in early trading on Tuesday.