Morrisons sees growth slowdown

The grocery business posted a like-for-like sales increase of 0.8 per cent, excluding VAT and fuel, in the 13 weeks to May 2, which the firm said built on its strong same-store rises over the previous three years.

Bradford-based Morrisons has seen growth slow in recent times, posting a like-for-like sales increase of six per cent in the 12 months to January 31, compared with 8.2 per cent the year before.

Today the firm said slowing commodity prices had almost removed food inflation from the figures and caused lower market growth, adding it was "satisfied" with the sales performance.

Morrisons said it continued to outpace the market, growing its share despite the anticipated slowdown in growth.

The chain said while it remains cautious about the economic environment and consumer spending, its expectations for the current year remain unchanged.

Total first quarter sales, which also exclude fuel and VAT, were up 5.9 per cent, or 9.5 per cent when fuel is included, illustrating the steep climbs in these prices compared to a year earlier.

"In a challenging environment for the consumer we have continued to invest for the benefit of our customers," the firm said.

"Our keen pricing, supported by eye-catching and innovative promotional offers, has again proved successful as consumers have continued to search for value."

Morrisons said it also saw record numbers of customers during the period.

This was the first update on trading since Dalton Philips took the helm and the supermarket said its new boss was "familiarising himself with the group's operations".

The former Wal-Mart executive replaced previous incumbent Marc Bolland, who took up the top job at rival retailer Marks & Spencer this week.

Mr Philips will face the challenge of maintaining profit margins in a falling food price inflation environment.

Morrisons has been a star performer in recent months, but while its other main three competitors Tesco, Sainsbury's and Asda, have been ramping up efforts on non-food ranges to offset the impact, the supermarket has no general merchandise offering to provide an alternative revenue stream.