Supermarket chain Morrison's said today that like-for-like sales were up 9.5% and total sales up 11.5% in the six weeks to January 6, hitting new record levels. It also boosted its market share, attracting 4m new customers into its 375 UK stores during the period. The City thought that the chain had played a blinder this Christmas, but this was even better than anyone expected (‘astonishing’, one analyst called it).
It certainly makes Morrison’s the undisputed winner of the Christmas sales battle. Sales growth was more than twice as fast as any of their rivals' – previous front-runners Waitrose and Sainsbury’s enjoyed a 4.1% and a 3.7% rise respectively, while the mighty Tesco and M&S both faltered. Morrison's has been taking customers of all of them, it said today, and not just in its Northern heartland - growth was actually fastest in the south of England.
So how exactly has it managed to pull this off? An expensive and high-profile advertising campaign clearly helped – Alan Hansen and Lulu obviously did a much better job of appealing to customers than the Spice Girls did for Tesco. The Match of the Day pundit may have seemed like an odd choice to flog wholemeal bread, but Morrison’s was clearly using its loaf.
The chain has also been trying to move slightly upmarket by focusing on fresh food (meat and fish sales were both well up), while an employee discount scheme contributed 1.5% of the sales growth. Its promotional offers in the run-up to Christmas also went down a storm, although it can’t have slashed its margins too far – it’s expecting full-year profits of nearly £600m.
The stellar showing is a major feather in the cap for CEO Marc Bolland, who only joined from Heineken in 2006 and is less than 12 months into his three-year ‘Optimisation Plan’. Bolland did the usual routine today about the prospects for 2008 (consumer spending slowdown, competitive market, cautious outlook, blah blah blah) but he also seemed quietly confident, predicting that ‘our strong value credentials will serve us well in these conditions’.
And we’re also pleased for chairman Sir Ken Morrison, who’s meant to be retiring at some point this year. Call us rank sentimentalists, but we think it would have been a shame if he’d left with his pride and joy still mired in post-Safeway ordure.
It's been a while, but suddenly it sounds as though there really are more reasons to shop at Morrison's...