Morrisons sales show modest rise

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The Independent Online

Supermarket group Morrisons said it had delivered another solid performance after a 1.3% rise in like-for-like sales in its most recent quarter.

The result for the 13 weeks to October 31 reflected a slight increase in retail price inflation, with the continuing difficult consumer spending environment keeping volumes under pressure.

Today's figure for same-store growth compared with a rise of 0.9% in the six months to August 1, a period when Morrisons racked up profits of £412 million.

Morrisons warned in September that it anticipated a low level of market growth in the remainder of 2010, with a slight rise in prices due to the re-emergence of some commodity price pressures.

Higher wheat and grain prices have led to a hike in the cost of bread, as well as higher meat prices as the cost of animal feeds rise.

Seymour Pierce analyst Kate Calvert said: "These numbers highlight that while inflation is coming through for the industry, volume growth remains lacklustre and we expect this situation to continue into 2011 given the consumer headwinds of rising taxation and public sector job insecurity.

"Morrisons has gone through a period of super-normal catch-up growth post the integration of Safeway and we believe it is returning to more normalised industry average growth rate."

Total sales in the third quarter were up by 2.8% and ahead by 4.7% when including petrol forecourt sales.

The company added in a short trading update: "In a continuing difficult environment for the consumer, performance in the third quarter has been in line with our expectations. Accordingly our financial outlook for the year remains unchanged."