Morrisons reports strong Christmas trade, even without a CEO

Supermarket group says that sales jumped 10.8 per cent over holiday period
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The Independent Online

WM Morrison became the latest retailer to report a bumper Christmas trading period yesterday, but warned that it could be another six months before it appoints a new chief executive.

The supermarket group's chairman, Sir Ian Gibson, said the hunt for a new boss was "progressing well" and that the company aims to make an appointment before the start of the second half of the company's financial year in July.

The group is seeking a new chief executive following the departure of Marc Bolland, who is on gardening leave serving out a year-long notice period before he takes the helm at Marks & Spencer. Sir Ian said: "Marc is on a one-year notice period. We are in discussions with him in a relaxed fashion regarding all the elements of his departure." Despite lacking a chief executive, the UK's fourth biggest supermarket chain reported an impre-ssive set of Christmas trading figures.

Total sales in the six weeks to 3 January, including fuel, were up 10.8 by per cent, while like-for-like sales were up 6.8 per cent.

"Morrisons has had another strong Christmas," Sir Ian said. "Once again, our distinctive offer, eye-catching promotions and relentless focus on our core strengths of fresh food and great value combined to help customers have a great Christmas. This has enabled Morrisons to finish the year strongly and although we remain cautious on the economic environment and consumer spending, we look forward to further progress in the coming year."

The numbers follow similar announcements by a number of rivals. Tesco said that it had enjoyed its best Christmas for three years, reporting a 4.9 per cent hike in sales, while J Sainsbury said it had improved sales by 4.2 per cent. The best overall performer was up-market supermarket group Waitrose, which saw sales surge 16.1 per cent in the 13 weeks to Boxing Day.

Morrisons warned however, that the rest of 2010 could be tougher. While reasserting full-year profit expectations, which analysts at Charles Stanley put at about £750m, Morrisons said in a statement that expectations of softer consumer spending would mean that conditions on the high street would remain difficult.

Morrison's share price dipped by more than 1 per cent after the results announcement, which analysts put down to the lack of a profits upgrade. The stock closed the day yesterday down 3.5p at 295.3p.

"We forecast strong growth from Morrison on a three-year view," said Clive Black, an analyst at Shore Capital. "We also recognise the cash generation and the asset-rich nature of the balance sheet. However, we currently discount such growth in our recommendation whilst the chief executive position remains vacant, and we await the articulation of a medium-term strategy – beyond the opening of supermarkets in southern England – which can diversify the group away from the relatively low-growth UK grocery market."