orrisons’ turnaround has been given another shot in the arm after recording the best sales growth out of its “big four” rivals.
The Bradford-based grocer beat City estimates by posting a 3.4pc lift in like-for-like sales during the 13 weeks to April 30.
For the first time Morrisons also unveiled the 0.4pc contribution from its wholesale business, which includes its Amazon partnership and its manufacturing business.
David Potts, chief executive, recently revealed his ambition to boost Morrisons’ wholesale arm and is planning to relaunch the Safeway brand later this year to supply independent convenience shops.
Morrisons said that it attracted 500,000 extra customers a week as the number of transactions rose by 4.6pc.
However the number of items per basket slipped by 6.9pc; this fall reflects the growing consumer shift towards smaller, more frequent shopping trips, as well as Morrisons’s recent launch of lunch options. Its lunch offer means that shoppers are now buying one or two items, such as a sandwich and drink, rather than a trolley-full of goods for the week.
The company also said its Price Crunch initiative has seen more customers come through its doors, with sales over Valentine’s Day, Mother’s Day and Easter particularly strong.
Mr Potts said: “We are improving the shopping trip in many different ways, which is making Morrisons more popular and accessible for customers. These new initiatives in-store, online, in wholesale and services are beginning to build a broader, stronger Morrisons.”
The supermarket is expanding its Nutmeg clothing range into womenswear in 50 shops and launching a new florist website, offering next-day delivery on bouquets. It is also launching a “food to order” offer, which includes a limited range of party food, beef wellingtons and ribs of beef for gatherings that can be collected from shops.
“After fixing the retail essentials, (queuing, availability, merchandising), Morrisons is now driving growth from expanding into more premium private label, clothing and general merchandising,” said Bruno Monteyne, analyst at Bernstein.
Mr Potts said the group was “working hard” to remain competitive, despite an increase in the price of food imports linked to the collapse of the Brexit-hit pound.
Analysts at Jefferies said that Morrisons had “superior defensive qualities” that set it apart from its supermarket rivals and would mean it could stand up to inflationary pressures.
Morrisons said its deal to sell groceries through Amazon “continues to grow”, with same-day and one-hour delivery service recently extended into more London postcodes.
“There is a long road ahead of the UK’s supermarkets, but of the three major players, Morrisons seems to be in the highest gear. Customers are flocking back, and like-for-like sales growth is trending strongly upwards,” said George Salmon, analyst at Hargreaves Lansdown.
“Morrisons has an edge over rivals such as Tesco in that it owns almost all of its stores, so much less of its cash is tied up by operating leases,” Mr Salmon added. “This better cash flow gives the group the power to simultaneously slash its prices in store and the debt on its balance sheet.”