Morrisons sales improve in first quarter

The FTSE 100 supermarket said group like-for-like including fuel was up 1.9%, while total sales were ahead 3.8% excluding fuel and 2.1% including fuel.

It said it continued to invest in the customer shopping trip, and again improved its competitiveness during the quarter.

Inflation was said to have been broadly flat and volume growth accelerated during the period.

As both a food producer and a retail operator, Morrisons said it was able to deal directly with farmers and growers, with its new 'wonky' brand of low-priced, good quality fruit and vegetables minimises waste and utilises more of the whole crop.

It also launched 'savers' recently - its lowest-priced own label range - initially comprising almost 300 ambient, chilled and frozen items.

In addition, the 'Nutmeg' brand continued to be popular with customers, and the new womenswear range was now in almost 130 stores.

Morrisons opened two new stores in the period, in Abergavenny and St Ives near Cambridge.

The board said both had a “strong” start, and the feedback from customers had been excellent.

As with many of our Fresh Look learnings of recent years, we will be applying successful new store local initiatives nationally across our estate.

Morrisons also said it was are now open for business as a wholesaler, as it started supplying its new partner McColl's through a rolling programme of around 25 stores per week during the first quarter.

Those stores would receive a full fresh, frozen and ambient offer from Morrisons, comprising both brands and the new Safeway range.

In addition, the company said it was supplying some McColl's stores with tobacco and some ambient products slightly earlier than we initially planned.

Overall, its wholesale supply initiatives contributed 1.8% to group like-for-likes, and it remained are on track for its targets of £700m of annualised sales by the end of the year and £1bn in due course. ​

“We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth,” said chief executive David Potts.

“We expect to continue to improve in the year ahead.

“During a busy period of exciting new ranges, new store openings, strong supermarket and wholesale growth, and the peaks and troughs of the seasons, our colleagues once again did an outstanding job for customers.”

As it announced at its preliminary results, Morrisons expected net debt to continue to fall during 2018/19, although first half phasing would be impacted by the timing of payroll payments due to last year's 53rd week.

Its expectations remained unchanged, and it said it was “confident” of another strong year ahead.