Morrisons has reported a slowdown in sales growth following tougher trading conditions since its last update in May.
A sales update from the British supermarket chain revealed that like-for-like sales in the 23 weeks to July 15 increased by 3.0 per cent, or 2.6 per cent including fuel, compared with 4 per cent at the time of the annual general meeting in May.
Chairman Sir Ken Morrison said the board was “satisfied” with the performance and added that it should be taken into account that the FIFA World Cup and hot summer weather had boosted the comparable period last year.
But Morrisons said converted stores, some of which are now in their third year of conversion, have continued to perform well.
“Sales volumes are lower than we would like, but the company’s new marketing and store programme will commence later this month,” commented the chairman.
“Good progress is being made towards meeting our ambitious margin and cost targets and we are confident that we are well on track to deliver our expected outcome for the year.”
However Philip Dorgan, analyst at Panmure Gordon, was less than impressed by the performance. “This is supposed to be a recovery story, so sales should be leading, not lagging,” he said.
“Management has turned Morrisons into a Safeway: a weak brand, which is over-reliant on promotions. It is badly positioned on green issues, organics, local product and non-food .”
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