Sales up as 700,000 new shoppers find Morrisons

Dec 5 2008 by Peter McCusker, The Journal

Peter McCusker

SUPERMARKET chain Morrisons today reported an 8.1% leap in its third-quarter sales thanks to its value ranges and cut- price deals.

The group said its efforts to keep shopping bills and fuel costs down had been “extremely popular”, with more than 700,000 new shoppers visiting its stores each week.

Morrisons, founded over 100 years ago on a Bradford market stall, also said it had agreed to buy 38 former Somerfield and Co-operative Food stores for £223.1m.

Like-for-like sales including fuel for the 13-week period to November 2 rose 13.3%, according to Morrisons. The increase builds on a 7.6% rise seen in the first half of its year as cash-strapped shoppers search around for the best deals.

It also far outstrips sales figures reported by the sector leader earlier this week, when Tesco reported a 2% increase in like-for-like sales – its worst performance since the last recession.

Marc Bolland, chief executive, said: “In this challenging economic environment more customers than ever before are choosing Morrisons.

“Our industry-leading deals and unique fresh food offer have attracted over 700,000 new customers to our stores.”

Morrisons – Britain’s fourth biggest supermarket chain – described the Co-op and Somerfield stores acquisition as its first big deal since the Safeway takeover in 2004.

It will add the shops to its existing portfolio of 150 smaller stores, with the outlets boosting its total space by just under 5%.

But the group which saw the man who championed its growth over the last 20 years, Sir Ken Morrison, stand down as chairman earlier this year, said it was not a front-runner to snap up stores from the ailing Woolworths empire.

It said: “We are not into the convenience market – the Woolworths end is much more that sort of size of store.”

Morrisons’ third quarter sales growth was its highest since the Safeway deal four years ago.

It said trade had been strongest across London, the south and Scotland.

The group has re-launched cheaper lines, slashed prices and launched promotions, including a Sunday lunch for four for £4, which it said attracted 250,000 shoppers.