Opening of the 500th Morrisons Daily convenience shop and Q1 trading update

Opening of the 500th Morrisons Daily convenience shop and Q1 trading update

Providing an update to investors on its performance for the 13 weeks that ended on January 29, 2023, Morrisons today reported better sales momentum, positive like-for-like sales, stabilised market share, and rising competitiveness.

With the opening of the Phoebe Street shop in Salford, Morrisons also passed the milestone of 500 Morrisons Daily convenience stores this week. In addition to its fully owned convenience store, McColl’s, which was acquired in May 2022, Morrisons also has franchise agreements with Rontec, Harvest Energy, Highland Fuels, independents, and Sandpiper in the Channel Islands. Currently, 350 former McColl’s shops are operating as Morrisons Daily, and an additional 10 are being converted each week.

Q1 Key Ideas

• Total revenue up 3.4% to £4,713m
• Group like-for-like (LFL) sales ex-fuel/ex-VAT up 0.1%, reflecting steady improvement over the last three trading quarters
• Further significant price cutting programmes to help customers through the cost of living crisis
• Continued investment and focus on My Morrisons loyalty scheme leading to greater customer engagement
• Three year £700 million cost savings programme underway to enable further investment in lowering prices, increasing service levels, investing in loyalty and expanding the convenience footprint

Chief Executive Officer David Potts commented on the Q1 business as follows:

“We still have a lot of work to do, but the company is starting to gain momentum with like-for-like sales now in positive territory and an improving trajectory over the last three quarters. Our market share has stabilized, our inflation rate is lower than that of our competitors, and Morrisons’ legendary competitiveness, color, and vitality are gradually making a comeback in every aspect of the company.

“Over the next three years, expense savings of £700 million are what we are aiming for. By allowing additional investment in our loyalty program, speeding up McColl’s conversions, adding more hours to our stores, and mitigating the substantial cost headwinds we face, this savings will help the company perform better.

“Even though the continued high levels of inflation have made things challenging for consumers, we have kept up with our programme of regular and meaningful price increases thanks to a strong start to our cost-savings initiative.

“Our coworkers have been the cornerstone of Morrisons’ better situation. I want to thank everyone at Morrisons for their ongoing dedication and positivity because they have continued to support our customers by offering a colorful, lively, fresh food focused shopping experience across the entire company.

David Potts commented on the opening of the 500th Morrisons Daily convenience shop.

“This is a significant turning point for us and solidifies our place as market leaders in the expanding convenience market in the UK. Customers are responding very favourably to the carefully crafted Morrisons Daily fresh food convenience offer, regardless of whether the location is a franchise or a former McColl’s store. They also obviously value our great value and our bright, contemporary store designs. Like-for-like sales immediately and significantly increase with every new Morrisons Daily convert, frequently by more than 20%.

“We anticipate reaching 750 Morrisons Daily locations in the fall and the 1,000-store milestone early in 2019.”

GSN