- Focus on availability and loyalty across the business -
- Continued good sales momentum -
Morrisons has today updated investors on its Q3 performance, covering the period from 29th April to 28th July 2024.
Key highlights
- Group like-for-like (LFL) sales ex-fuel/ex-VAT up 2.9%, primarily volume driven (2022/23: up 2.9%)
- Total sales ex-fuel £3.9 billion, up by 2.1%
- Further progress across our three strategic pillars: commercial excellence, operations optimisation and new value creation
- Strong performance from clothing brand Nutmeg with like-for-like sales up 8% and Back to School sales up 23%
- Availability improved by 2% points year-on-year aided by AI-powered availability cameras in over 400 stores
- Continued investment in Myton Food Group’s food making operations with the opening of a £13 million sardine processing factory in Cornwall
- A further 50 products added to the Aldi and Lidl Price Match bringing the total to almost 300
- Significant investment in the Morrisons More Card in August and September with the launch of a rolling programme of over 2,000 More Card prices
- Colleague pay raised to £12 an hour from October 2024; annualised investment in colleague pay of £151 million
- Today announced a ground debt transaction with net proceeds of £331 million
Rami Baitiéh, Chief Executive Officer, said:
“Our focus on listening to customers, better availability and improving the Morrisons More Card has driven another quarter of good headway across the board. Like-for-like sales remained positive, the switching data improved year-on-year and although the market was noticeably softer in Q3, our relative position improved and our market share stabilised.
“As inflation reduces we are seeing customers increasingly valuing Britishness, provenance, quality and the love of great value fresh food, all of which is in Morrisons heartland. Our price competitiveness improved further in the quarter as our Aldi and Lidl price match, More Card offers and everyday low prices combined to give customers increasing confidence in Morrisons great value.
“Nutmeg, our clothing brand, was a particularly bright spot with like-for-like sales in the quarter up by 8% and record sales in both women’s and men’s clothing. Back to School was especially positive with sales up 23%.
“Availability improved further in the quarter, helped by the installation of AI-powered availability cameras in the majority of our stores. These cameras monitor on-shelf stock levels, automatically reordering where necessary and alerting colleagues in real time to gaps. This system is bringing down the in-day replenishment times significantly, which in turn is having a positive effect on availability, sales and customer satisfaction.
“Loyalty remains a key focus for us. The current quarter will be a transformational one for the More Card with the introduction of a number of new elements. In early September, we introduced a rolling programme of over 2,000 “More Card Prices” with very significant savings on every offer. We are also extending the breadth of the loyalty scheme with the introduction of More Card points on our Amazon channel. The next phase is to introduce the More Card into our convenience stores, which will start in October.
“And finally I want to pay tribute to the whole team at Morrisons. It has been a tremendous effort over the last year to start the hard and detailed work that has set us onto a positive trajectory. We are just getting started, but the teamwork and positivity has been exceptional across the business and I want to say thank you to everyone for the part they are playing in the reinvigoration of Morrisons.”
Jo Goff, Chief Financial Officer, said:
“Every part of Morrisons - supermarkets, online, convenience, wholesale and Myton Food Group - showed good growth in the quarter, representing a robust performance across a diversified business.
“Today we have also announced a ground debt transaction with net proceeds of £331 million. The properties will remain under Morrisons control and our retail estate remains over 80% freehold. This transaction follows the deleveraging from the disposal of our forecourt business at the start of quarter, and if the proceeds from this transaction were also used to reduce debt, on a pro-forma basis, our debt would be £3.6 billion, down 41% from its peak.
“Looking ahead to the full year, we expect increased EBITDA and further operational progress across the board.”