Morrisons sales up 5.7% as online business soars

Bradford-based supermarket giant Morrisons on Tuesday reported a 5.7% rise in group like-for-like sales in its latest quarter and said its online shopping business was expanding fast.

For the 14-week period from February 3 to May 10, Morrisons said trading during individual weeks of the quarter was “highly volatile” with stocking up and then the initial impact of lockdown and weak Easter trading –followed by a significant improvement in recent weeks. 

Group like-for-like sales excluding fuel rose 5.7%, with retail up 5.1% and wholesale up 0.6%.

Group like-for-like sales including fuel were down 3.9%, with fuel like-for-like sales down 39.3%, and down 70% since lockdown, with customers currently making significantly fewer car journeys.

Morrisons said: “Our online offer is expanding significantly and at pace, providing different home delivery options especially for those customers most vulnerable and in need.

“For Morrisons.com, we have more than doubled the number of weekly home delivery slots, well in excess of the 60% increase we initially planned for.

“This has been achieved, together with our partner Ocado, through a substantial increase in the number of store-pick stores.

“We have also further stretched the capacity of the Dordon customer fulfilment centre.

“In addition, from a trial of just six stores in March, we will offer click-and-collect pick-up from almost 280 Morrisons stores by mid-June.

“We are confident we can again significantly increase the number of Morrisons.com home delivery slots over the coming weeks.

“Home delivery for customers has been further extended beyond Morrisons.com.

“We very quickly set up production facilities at four of our food manufacturing sites to prepare food boxes, which are delivered direct to customers’ houses by a third party.

“Ten different home delivery food boxes have been introduced so far, available either online or via a telephone call, aimed initially at providing essentials to vulnerable and self-isolating people, and recently extended to other options such as British meat, gluten free, BBQ, and Ramadan.

“In addition, we have formed a partnership with Deliveroo to deliver groceries in as little as 30 minutes to customers by courier from 130 Morrisons stores.

“The service is proving popular with customers, and has been extended to more deliveries and items, including a selection of beer and wine.

“During the period, we also significantly expanded the Morrisons store on Amazon Prime Now, the ultra-fast, same-day online home delivery service.

“At the time of the 2019/20 preliminary results in March, the service operated from 17 Morrisons stores in eight cities.

“By the end of May, it will have been extended nationwide to over 40 stores, covering most major cities and many towns.

“New areas covered include Edinburgh, Cardiff, Bristol, Portsmouth, and most of the major conurbations of the West and East Midlands.

“In addition, more London stores have been added, now expanding delivery coverage to over 90% of Greater London postcodes …”

Neil Shah, head of research at Edison Investment Research, said: “In line with the results of its competitors, Tesco and Sainsbury’s, Morrisons has seen an increase in sales excluding fuel of 5.7%, as revenues at the group were bolstered by panic buying earlier in the quarter only to be hit by reduced sales during the lockdown.

“Whilst the figures were largely expected, it will be interesting to see the longer-term effects of a declining demand for fuel, where Morrisons is more acutely exposed than its competitors, with like for like fuel sales down close to 40%.

“Despite signs of some elements of the lockdown gradually being lifted and the oil price stabilising, all eyes will be on how the risks in this division can be offset by some of the innovative partnerships Morrisons has launched.

“More shoppers are making use of Morrisons partnership with Ocado, meanwhile initial trials of the group’s collaborations with Deliveroo and Amazon Prime are promising.

“If these prove successful it should put Morrisons in a strong position for a post pandemic shift to online by consumers and a resurgence in their spending.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.