Morrisons posts impressive sales growth in fourth quarter
- Morrisons experienced a notable rise in like-for-like sales, with growth reported at nearly 5% in the last quarter.
- The company attributed this growth to improved product availability and a competitive pricing strategy.
- These positive results indicate effective progress in Morrisons' ongoing turnaround efforts.
In the United Kingdom, Morrisons has experienced significant sales growth as part of a turnaround effort since its acquisition by the US private equity firm Clayton, Dubilier & Rice in 2021. In the fourth quarter leading to October 27, 2023, Morrisons reported a 4.9% increase in like-for-like sales (excluding fuel and VAT), marking its strongest quarterly performance since the takeover. This follows a slower growth rate of 2.9% in the previous three months, prompting concerns about the success of the company's revitalization strategies. Across the entire fiscal year, Morrisons has shown an overall increase of 4.1% in like-for-like sales, which demonstrates a consistent growth trend over eight consecutive quarters. The company has also achieved a substantial increase in underlying earnings, which rose to £835 million from the previous £751 million. Despite challenges such as IT issues during the critical Christmas season that led to price cuts on popular items, Morrisons has credited a better availability of fresh products and a strategic price match initiative with competitors Aldi and Lidl as key drivers behind its market share gains. Morrisons' chief executive, Rami Baitieh, highlighted the company's commitment to reinvigorating its offerings and improving customer experience, which has resulted in increased customer transactions and competitive market positioning. The broad strategies implemented to enhance the product availability and pricing effectiveness demonstrate the supermarket's approach to navigating a complex retail environment amid rising operational costs. Additionally, the company announced plans to cut more than 200 jobs as part of its cost-saving measures in response to financial pressures exacerbated by new employer taxes introduced by Chancellor Rachel Reeves. In summary, the sustained growth in sales reflects a positive turnaround for Morrisons amidst a challenging retail landscape, pointing towards an effective reinvigoration plan. However, job cuts and responses to increased operational costs underscore the ongoing challenges that retailers are facing as they strive for profitability in a competitive grocery market.