Sunday 22 September 2019

Morrisons sales inch up despite Brexit uncertainty

The supermarket also announced a relaxation of its contract with Ocado.

Morrisons will temporarily exit one of Ocado’s sites (PA)
Morrisons will temporarily exit one of Ocado’s sites (PA)

By Alys Key, Press Association City Reporter

Morrisons has reported sales growth in the first quarter despite Brexit uncertainty hanging over shoppers’ heads.

Like-for-like sales excluding fuel were up 2.3% in the 13 weeks to May 5.

The supermarket said “political and economic uncertainty” was continuing to affect consumer confidence, even after an extension to the Brexit deadline.

Retail sales growth contributed just 0.2% to the overall figure, while the wholesale business accounted for the remaining 2.1%.

Morrisons has made significant moves to expand its wholesale business in recent years, with a particular focus on convenience stores.

Following the signing of a supply deal with retailer McColl’s, some of the chain’s stores have been rebranded as Morrisons Daily. A handful of stores at MPK Garages have also been rebranded to either Morrisons Daily or Safeway Daily.

Morrisons said both conversions had shown positive early signs, with strong sales growth.

Sales in the second quarter are expected to come up against tough comparables due to last year’s football World Cup, which was responsible for a bumper retail period.

Morrisons reiterated its confidence in achieving “meaningful and sustainable” growth.

Our new agreement allows us to have more than one digital partner, and opens the way for significant potential opportunities and partnerships in this important growth area for Morrisons Chief executive David Potts

Separately it was announced that Morrisons is to suspend part of its partnership with delivery firm Ocado.

The move follows the catastrophic fire at Ocado’s Andover facility in February, which has left the company looking for additional capacity in its existing estate.

As part of a change to the agreement between the companies, Morrisons will hand back its 30% share of Ocado’s fulfilment centre in Erith, south-east London.

In return it will not incur any costs for use of the warehouse and will pay a lower cost for Ocado’s store pick solution, which will continue to fulfil orders from Morrisons.com.

The exclusivity of the deal will also be relaxed, potentially allowing Morrisons to agree a new partnership with another digital player.

Chief executive David Potts said: “Our new agreement allows us to have more than one digital partner, and opens the way for significant potential opportunities and partnerships in this important growth area for Morrisons.”

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