Morrisons shakes off Aldi and Lidl competition as sales continue to rise
Morrisons shook off competition from discount rivals Aldi and Lidl to post another rise in sales during its latest quarter.
The Yorkshire-headquartered supermarket chain said group like-for-like sales, excluding fuel and VAT, grew by 4.1 per cent over the three months to April 28, boosted by a “great start” to its Aldi and Lidl Price Match scheme launched in February.
However, the growth represents a slowdown on the 4.6 per cent increase reported in the previous quarter.
The group, which was bought by US private equity firm Clayton, Dubilier & Rice in 2022, also reported that it has reduced its debt levels to £4bn from a peak of £6.2bn.
Its total sales, excluding fuel, rose by 3.7 per cent to £3.8bn while its underlying EBITDA for its half year increased by 16 per cent to £321m.
Morrisons eyeing 2,000 convince stores by 2025
Chief executive Rami Baitiéh said: “I am pleased with the overall performance of the business in the second quarter with supermarkets, convenience, wholesale and online all delivering growth and contributing to a 4.1 per cent increase in like-for-like sales.
“Over the last eight months we have listened carefully to over 340,000 customers, colleagues and suppliers and the insights from this exercise are helping to refine and shape the activity in all three pillars of our strategy: commercial excellence, operations optimisation and new value creation.
“It’s clear that availability and our loyalty scheme are the two areas our customers talk about the most and so we are focusing intensively on these areas.”
The CEO added that Morrisons price matching with Aldi and Lidl, which was introduced in February, has had a “great start and is giving customers increasing confidence in the competitiveness of our prices across the shop”.
Baitiéh also said that “convenience remains an important and strongly growing channel” for Morrisons.
The chief executive addd: “With the McColl’s conversion programme now complete and the recent acquisition of 38 stores in the Channel Islands, we have over 1,600 Morrisons Daily convenience stores across the country, about two thirds of which are wholly owned.
“With this strong growth trajectory we are now targeting a total of 2,000 convenience stores in 2025.
“Customer reaction to the significant investments we have made in the More Card has been very positive.
“We now have over five million active customers, and transactions using the card have grown by around 35 per cent in the last eight months.
“We are now targeting 70 per cent of transactions to be through the More Card over the medium term.”
Chief financial officer Jo Goff also said Morrisons’ latest financial period had been “another solid quarter of progress” and hailed the supermarket’s increased sales and volume improvements across its business.
She added that Morrisons’ debt has now reduced by more than a third and that the company has made “further progress” on its cost savings programme with £78m delivered in the quarter.
That development means more than £450m has been cut by Morrisons since the start of the year.
Morrisons is hoping to make £700m of cost savings over a three-year period.