Morrisons sales rise in ‘volatile’ quarter

Morrisons has revealed that trading in the first quarter of 2020 was “volatile” in light of the ongoing pandemic, despite seeing a “significant improvement” in recent weeks.

In the 14 weeks ended 10 May, group like-for-like sales, excluding fuel, were up 5.7%, with 5.1% of sales from retail and 0.6% from wholesale trading.  

Group like-for-like sales including fuel were down 3.9%, with fuel like-for-like sales down 39.3%, and down almost 70% since lockdown due to less vehicle usage. 

The group said that sales had been on an “improving trend” since the start of the year, and improved again before the impact of the virus to be flat for the first four weeks of 2020/21. 

Between weeks five to seven, there was “considerable stocking up and sales pull-forward”.

As a result of weak Easter trading and the start of a nationwide lockdown, retail contribution to like-for-like sales was negative for weeks eight to 11. However, in weeks 12 to 14, this contribution rose to 9.6%.

This follows Morrisons’ “gradual return” to normal trading hours, the introduction of more protective screens and safety measures and improved availability. 

The group said it has also “significantly” expanded its online offering and at pace, providing different home delivery options to vulnerable customers, and doubling the number of weekly home delivery slots for 

Morrisons said it also maintains a “very robust” financial position, with a strong balance sheet, low debt and a “strong debt maturity profile”. 

It has made efforts to improve its liquidity by extending a £100m revolving credit facility from July, and putting in place three new £100m RCFs, taking its total RCF facilities from £1.45bn to £1.75bn. 

In the first quarter, £70m has been drawn on its RCF, and while it expects this to increase during the second quarter, scenario planning suggests it will “sustain very significant liquidity headroom”.

David Potts, CEO of Morrisons, said: “We are facing into the unprecedented current challenges and are playing our full part to help feed the nation: working with determination, creativity and pace to serve customers as well as we possibly can.

“The professionalism, enthusiasm and resourcefulness of our frontline key worker colleagues is extraordinary and is showing Morrisons at its very best.”

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