Morrisons announces best sales in nearly 10 years

Morrisons CEO David Potts has overseen a renaissance of the company
Morrisons CEO David Potts has overseen a renaissance of the company
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Morrisons has reported its best quarter of sales growth in nearly 10 years and has pledged to help British farmers who have been hit by the summer drought.

The Bradford-based firm said like-for-like sales - excluding fuel and VAT - rose 4.9 per cent in the six months to August 5.
Sales in the three months to August 5, the group's second quarter, leapt 6.3 per cent - a nine-year high for the group.
Morrisons said it is set to grow whether or not Britain secures a European Union exit deal.
Chief executive David Potts said: "I think consumer confidence is an important barometer. We haven't seen any change really in consumer behaviour.
"Consumers are more concerned about the country's macro-economic position than they are feeling the pinch in their own circumstances, in which they feel pretty confident."
He said that there were "categorically" no plans to stockpile food as Britain approaches March 29.
This follows the Government's suggestion that it is up to grocers to help with stockpiling to ensure the UK has an adequate food supply in the event of a hard Brexit.
Morrisons said it was boosted by strong sales of local foods such as Yorkshire Squeaky Cheese, the county's answer to halloumi, which is now being sold in 40 Yorkshire stores.
The group was also helped by the weather and England's unexpected success at the World Cup.
"We all enjoyed the extended heatwave. We saw a 138 per cent increase in like-for-like sales of ice lollies," said Mr Potts.
"We sold 5 million litres of water in ice cubes.
"It's a food retailer's helpful little trio of a Royal Wedding, the national team in England doing well in the World Cup... and then the heatwave."
Morrisons said customers should prepare to buy more wonky vegetables to help out British farmers who have been hit by the summer heatwave.
"We stand ready to adjust our specifications on fruit, vegetables and flowers so that Morrisons sells what Britain has grown through the drought," said Mr Potts.
"It will be a wonky autumn and a wonky Christmas at Morrisons."
Morrisons' chairman Andrew Higginson said: “With each passing quarter, the Morrisons team is building a better and better business. New customers try Morrisons and tell us they really enjoy shopping with us: our friendly colleagues, the quality of our fresh food and our low prices.”
Mr Potts added: "We've reconnected with core customers and that's very, very important.
"As we look to grow Morrisons, we have to make the company more relevant to more consumer types."
Mr Potts said the group is attracting more young customers with initiatives like its vegan launch and free-from foods
"Our core customers are on a budget, people who enjoy Market Street, people who are looking for great value for money and fresh food," said Mr Potts.
Britain’s fourth biggest grocer beat forecasts with a 9 per cent rise in first half profit and reported an eleventh straight quarter of underlying sales growth, boosted by moves to broaden its business into wholesale.
The firm made an underlying pre-tax profit of £193m in the six months to August 5, up from £177m in the same period last year.
Mr Potts said: "Strong growth, including our best quarterly like-for-like sales for nearly a decade, together with another special dividend for our shareholders, shows how new Morrisons can keep improving for all stakeholders.
"Morrisons continues to become broader, stronger and a more popular and accessible brand, and I am confident that our exceptional team of food makers and shopkeepers can keep driving the turnaround at pace."
Morrisons increased its interim dividend by 11.4 per cent to 1.85p and also announced a special interim dividend of 2p per share, bringing the total interim dividend to 3.85p, up 132 per cent.
Describing the group as the "pride of Yorkshire", Shore Capital analyst Clive Black said: "Morrisons has recorded another very productive six month period as reflected in interim results that at £193m are a little ahead of our £191m estimate.
"The business has been transformed by David Potts & Co, so delivering first half like-for-like sales growth of 4.9 per cent and 6.3 per cent in the second quarter, the strongest rate since 2009, against two year positive comparatives, helped by accelerated wholesale activity.
"The interim dividend is increased by 11.4 per cent whilst the group has announced a maiden interim special distribution of 2.0p, a combined increase of 132 per cent year on year, which we deem to be fabulous news – we now forecast a recurring 6.0p special dividend."
After a £51m net adjustment, taking into account a previously announced bond tender offer, the group reported pre-tax profits of £142m, down 29 per cent on the previous half year.