Morrisons boosted by sales update
Supermarket group Morrisons boosted recovery hopes today after revealing like-for-like sales jumped 6.1% in the past nine weeks.
The UK-based chain, which has faced difficulties since the acquisition of larger rival Safeway in 2005, said trading continued the encouraging trends reported earlier in the year.
Chairman Ken Morrison added the company was pleased with progress, particularly from a better-than-expected improvement in margins.
Shares jumped by 5% following the trading update.
The 6.1% increase in like-for-like sales - stripping out the impact of fuel sales - took the figure for the 25 weeks to July 23 to 4.6%. The improvement was seen in core Morrisons stores, as well as those converted from the Safeway format.
Total sales fell by 2.2% because Morrisons has sold off a number of sites as part of the integration of the Safeway portfolio.
Morrison said: “The board is pleased with the progress being made towards the delivery of our optimisation plan targets – in particular our goal to improve gross margin by 90 basis points over three years, which is being delivered ahead of plan.”
Morrisons has issued a string of profits warnings as a result of logistical problems relating to the integration of £3bn (€4.4bn) acquisition Safeway.
There have also been problems in the boardroom over the role of the group’s 74-year-old chairman Morrison, son of the group’s founder.
The group announced in June that Morrison had bowed to shareholder pressure and would relinquish effective control of the firm.
He will stay on as chairman until 2008 as already planned, but new chief executive Marc Bollard, who takes over from Bob Stott in September, will take control of the executive board, which is responsible for the day-to-day running of the group and is currently chaired by Morrison.
