Morrisons reports surge in Christmas sales

Date : 05 January 2021

Nick Gladding

Senior Retail Analyst

In a trading update, Morrisons has reported continuing strong sales growth through in the run-up to Christmas and the New Year. Customer and brand metrics also improved, market share grew and online and wholesale channels developed rapidly.

Accelerating sales growth

In the 22 weeks to January 3rd, total ex fuel sales increased by 8.7% and LFL sales by 8.1%, comprising a 7.2% contribution from retail and 0.9% from wholesale. Total sales benefited from the opening of three new stores (in Helensburgh, Glenfield and Dalton Park).

In Q3 (13 weeks to November 1st) LFL growth was 7.1%. Sales picked up briefly at the start of the second England lockdown before resuming earlier growth and then culminated in a strong Christmas and New Year. For the nine weeks to January 3rd, group LFL advanced by 8.5%, with 9.3% achieved in the final three weeks of the period.

Key trends at Christmas

  • Christmas shopping began earlier than usual with a renewed focus on traditional fare. Morrisons saw strong growth in sales of champagne, whole salmon and Free From mince pies
  • Online sales more than tripled across Morrisons channels. Growth accelerated at Morrisons.com and the Morrisons on Amazon and topped up by expanding contributions from store pick home delivery, click and collect, orders through Deliveroo, food boxes and doorstep delivery. Morrisons expects online profits to grow as it continues to develop the channel
  • Wholesale sales growth stepped up at Christmas as Morrisons began to supply a further 130 McColl’s stores. The final c. 100 McColl’s stores will transfer to Morrisons by March 2021. McColl’s will also convert more of its stores to the Morrisons Daily format following strong results from the initial 31 conversions
  • Morrisons doorstep delivery service completed 35,000 orders in the two weeks before Christmas, providing a valuable service to the isolating and isolated

 

Profits guidance maintained

Morrisons continues to expect profits before exceptionals to be in the range of £420m-£440m prior to its rates rebate payment of £230m. Estimated total direct COVID-19 costs for 2020/21 are now expected to reach £280m following the second closure of cafes and the impact of lockdown on food-to-go sales

 

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