Morrisons was saved from being embarrassingly ejected from the FTSE 100 on Wednesday after a mid-week share price surge was triggered by signs its trading performance is finally improving.
The retailer was widely tipped to get the boot in the FTSE’s annual recalibration of the index, having seen more than a third of its value wiped away since January 2014. However, Kantar Worldpanel’s monthly market share figures found Morrisons had recorded its first 12-week sales rise since December 2013. The 0.1% sales growth for the 12 weeks to 24 May drove Morrisons shares up 5.1% until Wednesday’s close to 178.1p.
Investors boosted Morrisons once more on Thursday morning, with shares rising by a further 1.3% to 180.4p, though it is still trading well below the 200p-plus levels seen in March. Analysts were more cautious on the importance of its uptick in Kantar’s sales figures, noting the primary driver behind the improvement were very soft comparable figures last year as Morrisons saw a 3.9% sales collapse in the 12 weeks to 25 May 2014.
Bernstein analyst Bruno Monteyne called the figures “welcome news for David Potts” but cautioned: “It is driven by non-food (2.7% growth non-food vs -0.2% food), not exactly where we would expect Morrisons to be investing.”
The other two listed supermarkets recorded a sales declines, though not as much as Asda’s -2.4%. Tesco fell 1.1% on Tuesday to 207.5p after its sales were down 1.3%, while Sainsbury’s was down 1.2% to 245.1p after its own 0.3% fall during the period. However, they recovered 1.4% to 210.4p and 1.9% to 249.8p respectively on Wednesday, after data from the BRC/Nielsen suggested the deflationary picture was stabilising,
WH Smith shares were boosted by 3.3% to 1,589.3p after it revealed its first quarterly group-wide sales increase for six years. Overall sales were 1% up on a like-for-like basis in the 13 weeks to 30 May, driven by an 8% rise in travel sales (like-for-like growth of 4%), though high street sales fell 4%. Investec analysts called the results “another reassuringly in-line performance”.
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