Morrisons posts 7% sales growth

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The Independent Online

Supermarket chain Morrisons kept up the pressure on its rivals today after unveiling further strong sales growth.

The retailer saw like-for-like sales excluding fuel rise 7 per cent during the quarter to May 4, a figure higher than the 4.6 per cent reported for the financial year to February 3 but down on the 9.5 per cent rate achieved over the Christmas period.

Bradford-based Morrisons said despite a "noticeably tougher economic backdrop", it continued to benefit from improving customer numbers.

The retailer added: "Whilst the market backdrop remains challenging with ongoing pressure on commodity and energy costs and weak consumer confidence, the board is encouraged by the performance of the business to date."

Morrisons total sales excluding fuel during the first quarter were up 8.6 per cent.

In a trading update, the retailer mentioned the return of price inflation due to rising raw materials but did offer detail about how consumers were being

affected.

Official figures for food inflation has been running as high as 6.6 per cent this year, but supermarkets have said in-store promotions have kept shop floor price rises at a much lower level.

Morrisons said: "Much of this (inflation) has been caused by the undersupply of commodities globally, exacerbated by poor harvests last year.

"We manage all our costs carefully so that our customers continue to get the great value that they expect from Morrisons in their shopping basket."

Supermarket sector data this year has consistently put Morrisons' sales growth ahead of rivals like Tesco and Sainsbury's.

The latest figures from TNS Worldpanel said Morrisons enjoyed 8.7 per cent sales growth during the 12 weeks to May 18, compared to 6 per cent rise for Tesco.

Morrisons, which trades from around 375 stores in the UK, said the roll out of its new yellow and green branding will be completed by the end of July 2008.

The company's annual general meeting in Bradford today will be the first without veteran Sir Ken Morrison at the helm. The son of founder William Morrison stepped down as chairman in March after 55 years' service.

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