Morrisons sees surge in food-to-go sales as Brits take to road again

Morrisons continued to see robust sales in the past three months as the supermarket chain benefited from remaining open as “non-essential” retailers were forced to shut their doors.

Tuesday, 11th May 2021, 8:53 am

Releasing a trading update, the grocery major said sales in the 14 weeks to May 9 grew 2.7 per cent on a like-for-like basis, excluding fuel, including a 113 per cent leap in online sales. Morrisons’ internet footprint is smaller than its rivals, with analysts seeing the potential for rapid growth in that area.

The group also enjoyed strong growth in its wholesale division – up 21 per cent – thanks to a new partnership with McColl’s convenience stores, where Morrisons supplied products to 230 extra sites in recent weeks.

Around 1.1 per cent of the like-for-like growth came from the wholesale business, with the rest from its stores.

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Morrisons said sales in the 14 weeks to May 9 grew 2.7 per cent on a like-for-like basis, excluding fuel, including a 113 per cent leap in online sales. Picture: Mikael Buck/Morrisons

With fuel sales included, which bosses noted were almost back to pre-pandemic levels, the group saw a 5.3 per cent jump as more motorists returned to the roads with lockdown restrictions easing.

But prior to the easing of lockdowns, the chain revealed it had to spend an extra £27 million in Covid-19 costs during the past three months to cover for staff absences and store marshals.

Chief executive David Potts told investors: “We’ve had an encouraging start to the year, with positive like-for-like sales and some good momentum across Morrisons both on a one and two-year view.

“The pandemic is not yet over, but it is in retreat across Britain and there is much to be positive about as something approaching normal life begins to take shape.

A Morrisons colleague with a donation of Easter Eggs - some of 100,000 donated to foodbanks this year. Picture: Mikael Buck

“Our forecourts are getting busier, we are seeing encouraging recent signs of a strong rebound of food-to-go, take-away counters and salad bars, and our popular cafes will soon fully reopen.

“The nation has a summer of socialising and sport to look forward to and we’ll all be able to rediscover the joys of meeting up and eating well together. Whichever way consumers choose to enjoy their renewed freedom, we will be there for them.”

He added: “Our increasingly special butchers, bakers, fishmongers and other food makers are helping to brighten shopping trips, and the growing reach of our online businesses is attracting new customers and broadening the appeal of new Morrisons.”

Sophie Lund-Yates, equity analyst at financial services provider Hargreaves Lansdown, said: “Morrisons is still an underdog when it comes to online. There’s still a real opportunity though, because it offers the chance for exceptional growth in the coming years, and we’re already seeing signs of this.

“Where Morrisons really powered ahead last quarter is the huge increases in food-on-the go – it seems the world normalising is translating into higher sales in this area.”

Adam Vettese, an analyst at investment platform eToro, noted: “Morrisons is often in the shadow of its larger rivals Tesco and Sainsbury’s, but it has some serious momentum behind it at the moment.

“With Covid rates now much lower and life returning to something resembling normality, it’s likely we will see even greater profit growth in the coming months.”

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