Morrisons sales growth slows as supermarket faces ‘highly competitive’ market

The supermarket group said total sales grew by 1.7% to £4bn over the 13 weeks to April 26

Morrisons has reported a slowdown in sales growth for its most recent quarter amid “highly competitive” market conditions.

The supermarket chain said total sales increased by 1.7% to £4bn over the 13 weeks to 26 April. This marked a slowdown from the 2.6% rise recorded in the preceding quarter.

Like-for-like sales growth also eased to 2.2%, down from 2.8% in the previous three-month period.

Chief executive Rami Baitieh said he remained “pleased” with the latest results and pointed to an “encouraging start” to the third quarter, expressing optimism that sales would receive a lift from the World Cup and Father’s Day.

The firm emphasised it had made “good progress” with its growth strategy during the quarter, maintaining a strong focus on value to attract customers.

Morrisons has, however, recently been overtaken by discount competitor Lidl to become the UK’s fifth largest grocery retailer. The chain now sits in sixth place, having seen its share of the grocery market decline in recent years.

Mr Baitieh has spearheaded a significant turnaround plan at Morrisons, aimed at improving sales and profitability. On Wednesday, the company announced that underlying earnings climbed 5.7% to £323m for the first half of its current financial year.

Morrisons confirmed it delivered a further £48m in cost savings during the latest quarter, bringing it closer to achieving its £1bn savings target as part of its long-term strategy. As part of its cost-cutting drive, the supermarket also revealed plans last month to close around 100 loss-making convenience stores, pointing to “Government policy” as a factor compounding its cost pressures.

In its latest trading update, the retailer confirmed it had still managed to open 30 new Morrisons Daily franchise stores during the quarter, with plans to launch hundreds more in the coming years.

Mr Baitieh said: “In a highly competitive market, we’re focusing hard on delivering the best value for customers to give them more reasons to shop at Morrisons.

“While more recent international news creates some grounds for optimism, we continue to monitor the impact of input inflation very closely and we remain committed to doing whatever we can to help keep prices down for customers.”