Snow excuses needed for Morrisons after Christmas sales boost

The supermarket has beat expectations for the six weeks to January. But it reckons 2011 could be a tough year.

by Emma Haslett
Last Updated: 06 Nov 2012
Morrisons has become the first of the ‘big four’ supermarkets to release its Christmas sales figures, and things are looking reasonably positive: the supermarket has posted a like-for-like sales rise of 1% in the six weeks to January 2 despite the snow, beating analysts’ expectations of 0.6%. It’s a strong performance for a retailer that had seen its sales tail off slightly during the final part of last year. But can it carry 2011 on in the same vein? New CEO Dalton Phillips seems cautiously optimistic – for now…

Not unreasonably, we've heard a lot of complaints from retailers about the negative impact of the cold snap. But Morrisons actually gave it some of the credit for this sales rise, suggesting that it encouraged shoppers to buy most of their Christmas food, drink and gifts in one go (although we’re not sure who buys all their Christmas presents at a supermarket…). And it seemed to boost customer numbers, too: Morrisons served an average of 2m more customers a week over the Christmas period compared with five years ago, pushing up total sales (including new stores) by 3.1%. As Philip Dorgan, an analyst at Altium Securities pointed out: ‘there’s no whingeing about the weather’ here.

But it wasn't just about the snow. Philips also bigged up the supermarket’s ad campaign, which shows friendly supermarket workers demonstrating their in-store Panettone-making skills to precocious drama school-types (‘it’s not from Italy, it’s from Morrisons’). Apparently, it demonstrated that the supermarket isn’t just about ‘great value’, it’s also about ‘high quality’. Quite.

Sales growth of 1% might not sound like much, particularly in light of some of the numbers posted by the supermarkets (including Morrisons) in the last few years. But times have changed; this is a similar figure to Tesco, and after things seemed to be slowing down at the back end of last year, beating City forecasts suggests a return to form.

But although Phillips insists Morrisons is ‘well-positioned’ to make progress, it's going to be a tough 12 months ahead. With ‘disposable incomes coming under increasing pressure’, Dalton reckons the number of people doing a regular ‘big shop’ might be few and far between. How very inconvenient of them.

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