Morrisons has reported that total ex-fuel sales rose by 0.6% in the 13 weeks to 5 May 2013 while LFL sales were down by 1.8%. During the quarter Morrisons succeeded in communicating its points of difference more clearly and sharpening its promotional programme, while also making good progress on its longer term objectives of driving the topline, increasing efficiency and capturing growth.
Encouraging start to year
While negative the LFL figure is a marked improvement on the -4.1% result from Q4 and -2.1% for 2012/13 as a whole and suggests that Morrisons new marketing initiatives are resonating with customers. Key here has been the 'More of What Matters' programme to communicate the benefits of Morrisons vertical integration, craft skills and affordable fresh food offer, which has been supported by investments in price through 'Pick of the Street' deals on fresh lines and the Payday Bonus monthly loyalty incentive.
New store openings on track
During the quarter Morrisons opened six new stores, including two Morrisons M locals, and also added 80 stores to its convenience pipeline through the acquisition of former HMV, Jessops and Blockbuster sites. This will enable Morrisons to accelerate its convenience store openings, with 18 stores expected to open in Q2 and 100 stores targeted to be trading by next January.
Fresh Format rollout builds momentum
Morrisons continues to roll out its Fresh Format concept across its estate, tailoring the approach according to catchment and is on track to have upgraded 40% of its estate by year end.
Strong start for Nutmeg
Morrisons has reported strong initial sales of its new Nutmeg children's clothing range. Launched on 21 March, the range is pitched as offering high street quality at supermarket prices rather than being the cheapest in the market. According to press reports range is currently available in 105 stores and Morrisons is looking to increase its reach to around 200 stores by year end.
Ocado discussions ongoing
Morrisons has also indicated that its plans to launch an online food operation by January 2014 are on track and that its discussions with Ocado regarding intellectual property and operating knowledge are ongoing.