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Morrisons (MRW) has recorded another quarter of positive growth in the 13 weeks to 1 May, with like-for-like sales excluding fuel up 0.7%.
Following on from its first quarterly growth in four years in the fourth quarter of its 2015/2016 financial year, Morrisons saw like-for-like sales grow 1.2% including fuel during the period.
Total sales excluding fuel were down 1.8% (down 0.9% including fuel), reflecting the impact of supermarket closures and exit of the M local chain. Online contributed 1.0% to like-for-like growth during the period.
Like-for-like transactions were up 3.1% in the quarter and like-for-like volume growth was “strong” amid deflation of -2.6%.
This growth in transactions was partly driven by a 17% increase in food to go sales – but that, and the launch of self-scan and express checkouts – meant items per basket were down by 2.8%.
David Potts, chief executive, said: “We are encouraged by progress across our six priorities. There is still much to do and our colleagues are working very hard to improve the shopping trip and save customers every penny we can. Customers are responding and satisfaction levels remain ahead of last year. We are of course pleased with a second consecutive quarter of positive LFL sales, which demonstrates our aim to stabilise trade is taking effect.”
Morrisons shares are 1.6% up this morning to 190.5p on the back of the numbers.
Morning update
Hotel Chocolat has successfully floated on London’s AIM market with a float valuing the chocate maker and retailer at £167m
The company has placed 8,108,108 new and 29,398,471 existing ordinary shares with institutional and other investors to raise gross proceeds of approximately £55.5m.
The company has conditionally raised £12m (before expenses), which will be used to accelerate the group’s growth capital expenditure plan. In addition, Hotel Chocolat’s founders will receive £43.5m as a result of the placing. The shares will begin trading on 10 May.
Later this morning Reckitt Benckiser will face the potential anger of shareholders protesting about CEO Rakesh Kapoor’s bumper £23m pay packet.
Some 17% of Reckitt investors rejected the FTSE 100 firm’s remuneration report last year and the protest is expected to be larger at its AGM later this morning.
Also, in the US Kellogg’s (K) and Kraft Heinz (KHC) release their first quarter sales figures later today.
The FTSE 100 is back up 0.3% to 6,128.4pts this morning. Most grocery and fmcg stocks are up, including Greggs (GRG), up 5.4% to 1,105p, Conviviality (CVR), up 3% to 214pp and Premier Foods (PFD), up 1.8% to 38.7p.
Tesco (TSCO) is back up 1.4% to 162.3p and Sainsbury’s (SBRY) is back up 0.8% to 269.8p.
Yesterday in the City
It was a grim day for the UK’s biggest supermarkets as grocery share prices were hammered by Sainsbury’s lower than expected full-year earnings and underwhelming market share figures from Kantar Worldpanel and Nielsen.
Sainsbury’s (SBRY) plunged 6.3% back down to 267.8p after missing analyst expectations with a 13.8% drop in underlying profits and issuing sobering commentary about the ongoing effect of the price war and deflation.
The contagion from Sainsbury’s – and the sales drop recorded across the big four by Kantar – took Tesco (TSCO) down 5.3% to 160p, Morrisons down 1.8% to 187.5p and Marks & Spencer down 1.7% to 413p.
It was a downbeat day in the City generally, with the FTSE 100 heading to a new month-long low after falling another 1.2% to 6,112pts.
One rare bright spot for the grocery sector was a 1.5% rise in Ocado (OCDO) shares to 294.5p, which food on the go retailer SSP Group (SSPG) was up 0.8% to 287.6p.
Imperial Brands (IMB) fell 0.8% to 3710p after its first half results yesterday, while there were also falls for Greggs (GRG) down 2.1% to 1048p, Tate & Lyle (TATE) down 1.5% to 590.5p and Coca-Cola HBC (CCH), down 1.1% to 1,373p.
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