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Growth slowed to 1.4% in the 12 weeks to 24th March, according to Kantar. This makes it the slowest growth rate since March 2018. Inflation edged up from 1.4% to 1.5% causing implied volumes to dip into negative territory. We look at the results in more detail.

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The UK's fourth largest retailer Morrisons has delivered further growth in revenues and profits in newly released full year results for the 52 weeks to 3 February 2019.

Key numbers

  • Group LFL (ex VAT and fuel): +4.8% (2017/18: +2.8%)
  • Revenue +2.7% to £17.7bn, (+5.1% excluding fuel using a 52 week comparative)
  • Retail LFL: +1.5% (Supermarkets +1.1% and online through Ocado's CFCs +0.4%).
  • Wholesale LFL: +3.3% (mainly through supply to McColl's and Amazon)
  • Profit before tax and exceptionals +8.6% to £406m (+10.0% on a 52 week basis)
  • Net debt £997m, up from £973m in 2017/18

Solid fundamentals

Despite market challenging market conditions, Morrisons has now achieved more than three years of positive LFL growth and total ex-fuel revenue growth at 5.1% was the best since 2009/10 (on a 52 week basis). 52 week profits before exceptionals were up by 10% and 34.4% over three years. Net debt remains low as it continues to deliver against its Fix, Rebuild and Grow strategy.

Continuing growth through core supermarkets business

Morrisons core supermarket business has remained in growth, though this has become more challenging as it trades against tougher comparatives. In Q4 LFL growth slowed to 0.6%, its lowest rate for three years. Strategy continues to be focused on Morrisons six priorities.

Key achievements over the last 12 months include:

  •  'Morrisons Makes It': This now functions as a standalone brand encompassing all fresh items from across Market Street and has become a key point of difference from competitors
  • Sharpening prices: Prices on popular Christmas lines fell for the second year running, with lower prices on key fresh commodity items enabled by Morrisons increasing ownership of manufacturing facilities
  • Own brand innovation: Morrisons launched several new ranges to meet shopper preferences, including Savers, V Taste (vegan), Little Kitchen (children's) and two healthy heating lines (Counted and Fresh Ideas)
  • Customer satisfaction: Improvements particularly in 'colleague friendliness' and the checkout experience lifted customer satisfaction. Its tracking metric is up 20% since the start of 2015/16
  • Digital: Customers can now receive and redeeem points and personalised offers digitally through the Morrisons More app
  • Online: With the launch of Ocado's new Erith CFC and store pick operations in Scotland, Morrisons.com can now reach 75% of UK households
  • Local Solutions: Sales increased by 27% in 2018/19 and have almost doubled over three years. Morrisons is also tailoring its offer more to local customers for events including Hogmanay and Ramadan 
  • New services: Over 1,000 service points have been introduced at stores for services including Amazon, Doddle and Timpson
  • Estate renewal: 60 Fresh Look improvements were completed during the year, bringing the total to almost 300 since the start of the programme. 4 new stores will open in the year ahead - two new and two replacements.

 

Wholesale boosts growth

The scaling up of Morrisons wholesale operations was fundamental to the group's growth during the year, enabling it to hit its £700m target for annualised wholesale sales ahead of the year end. Highlights included:

  • 1,300 McColl's stores supplied by August 2018. Morrisons will takeover supply for the remaining 300 McColl's conveneinec stores towards the end of 2019.
  • Trial announced to convert 10 larger (ex-Co-op) McColl's stores to the Morrisons Daily format, starting in late March
  • Safeway Daily small store fascia being trialled following new partnership with MPK Garages
  • Launch of Morrisons Daily stores in the Channel Islands through partnership with SandpiperCI
  • Expansion of 'Morrisons at Amazon' service to new areas, with delivery within one hour
  • International exports commenced to Big C in Thailand

 

For more insight visit (Subscibers only):

UK LFL Tracker Compare Morrisons quarterly results with Big Four competitors over the last five years

Morrisons St Ives. See inside Morrisons latest new build store

An updated Strategic Outlook for Morrisons report will be available shortly

 

 

A report in the Grocer magazine has revealed that national convenience retailer McColl's will convert 10 of its stores to the Morrisons Daily fascia.  The first of these stores, located in Bolton, will re-open in late April after a 10-day refit.

Trial stores will feature Morrisons private label

In line with other stores now being franchised under the Morrisons Daily fascia by the likes of Rontec, these 10 McColl's stores will be supplied with Morrisons private label lines rather than the Safeway products that feature in the McColl's badged stores.

Points way to future evolution of McColl's/Morrisons relationship?

With Morrisons now acting as the wholesale supplier to 1,300 stores in McColl's wider estate, the opportunity for McColl's draw on the Morrisons brand credibility is clearly one way to further enhance its progress towards repositioning its stores with a fully-fledged grocery convenience offer.  For Morrisons the opportunity is to further extend its brand in a market sector where currently it has a limited presence.

A spokesperson for McColl's commented:

'We regularly trial new initiatives as we strive to continually improve our customer experience and enhance our neighbourhood convenience offer.  We can confirm we will be trialling the Morrisons Daily fascia and Morrisons own-label products at 10 of our stores from April.'

The UK’s Groceries Code Adjudicator, Christine Tacon, has today (18 February) launched her annual survey, inviting suppliers to share their experiences of trading relationships with major retailers and highlight any issues they are facing.  

This year the survey – the sixth carried out by the GCA - includes Ocado and B&M, which were designated by the Competition and Markets Authority in November last year.  

Suppliers can complete the survey at www.yougov.com/gca. It will remain open until 23 April.  

Survey key to regulatory decision making  

Christine Tacon said: “The annual survey plays a huge role in my work.  It sheds strong light on the behaviour of the retailers and tells me how well they are complying with the Code.  I use the information I receive to help identify top issues and to decide where to focus my discussions with the businesses I regulate.  

“Thanks to the large numbers of suppliers who have taken part in previous years I have been able to delve deeper into specific issues, identifying particular challenges for individual retailers to work on.

“I need all sectors and sizes of groceries suppliers to complete my survey so please take the time to fill it in, and I welcome a cross-section of views from within suppliers. I am hoping as in past years to receive more than 1,000 replies from suppliers.”    

Confidentiality assured

The independent polling company YouGov runs the survey on behalf of the GCA so suppliers can be confident the information they provide is treated in complete confidence.  YouGov collects and analyses the answers and will present the results at the GCA annual conference, which will be held on 24 June in Westminster.  Registration for the conference is now open at: www.gov.uk/gca.

Presentations

18/04/2019
Our selection of key insights from across Retail Analysis and ShopperVista from the last three months. This report includes the latest macroeconomic and shopper sentiment data, retailer results and market shares. We also highlight the latest channel and market trends, and new store formats.
02/04/2019
Kantar market shares are generated using Kantar Worldpanel’s till-roll scanning methodology and extrapolated using a sample of 30,000 households. Figures are calculated over a rolling 12 week period and include VAT.
01/04/2019
An essential summary of trading priorities, latest developments, and other key commercial insights for Morrisons.
View all presentations

Key presentations

We review Morrisons full year 2018/19 results and as it continues to deliver against its 'Fix Rebuild and Grow' turnaround strategy.

This in-depth guide to the United Kingdom explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for Morrisons.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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