Like-for-like sales growth has slowed at Morrisons in a “noticeably softer” third quarter as new CEO Rami Baitiéh continued his turnaround efforts.
The supermarket chain said total sales, excluding fuel, were up by 2.1% to £3.9bn for the 12 weeks to 28 July, with like-for-like growth of 2.9% driven primarily by increased volumes. It represented a slowdown from the 4.1% rise in like-for-like sales in the second quarter and a 4.6% jump in Q1.
Baitiéh said a focus on listening to customers, better availability and improving the Morrisons More Card had led to “another quarter of good headway across the board”.
“Like-for-like sales remained positive, the switching data improved year-on-year and, although the market was noticeably softer in Q3, our relative position improved and our market share stabilised,” he added.
On-shelf availability improved by 2% points year-on-year, thanks to AI-powered cameras monitoring shelves across more than 400 of its stores.
Price competitiveness also improved in the quarter as Morrisons added a further 50 products to the Aldi and Lidl price match offer, with almost 300 items now included in the scheme.
There was also significant investment in the Morrisons More Card in August and September, with the launch of a rolling programme of more than 2,000 More Card prices.
“Loyalty remains a key focus for us,” Baitiéh said. Morrisons has extended the breadth of the loyalty scheme with the introduction of More Card points on its Amazon channel, and the next phase is to introduce the card into convenience stores, starting in October.
The results follow an announcement earlier this morning that Morrisons had struck a deal to sell ground leases on 76 of its supermarkets in a deal worth £331m.
CFO Jo Goff confirmed the properties would remain under Morrisons’ control and added its retail estate continued to be more than 80% freehold.
She said if the proceeds from the deal were used to pay down its debt pile, the group’s burden would fall to £3.6bn, a 41% decrease in its peak level following the takeover by private equity firm Clayton, Dubilier & Rice. It follows the £2.5bn sale of its petrol forecourt business to fellow CD&R-owned Motor Fuel Group earlier in the year.
Goff added the group expected EBITDA to increase in the full financial year and “further operational progress across the board”.
Baitiéh said: “Finally, I want to pay tribute to the whole team at Morrisons. It has been a tremendous effort over the last year to start the hard and detailed work that has set us onto a positive trajectory. We are just getting started, but the teamwork and positivity has been exceptional across the business and I want to say thank you to everyone for the part they are playing in the reinvigoration of Morrisons.”
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