- Q1 like-for-like sales up 0.1%
- Total sales up 3.4%
- Targeting 700 mln stg of cost savings
LONDON, March 30 (Reuters) - British supermarket group Morrisons returned to underlying sales growth in its latest quarter, saying it was benefiting from a push to improve its price competitiveness.
Morrisons, owned since 2021 by U.S. private equity firm Clayton, Dubilier & Rice, also said on Thursday it was targeting 700 million pounds ($867 million) of cost savings over the next three years, enabling it to further invest in its loyalty programme, grow its convenience store business and mitigate the cost headwinds it faces.
Monthly industry data has consistently shown the group underperforming rivals, including market leader Tesco and No. 2 Sainsbury's and last year it was overtaken as Britain's fourth-largest grocer by market share by German-owned discounter Aldi, according to researcher Kantar.
But Chief Executive David Potts said a drive to become more competitive on key products was starting to work.
"Momentum in the business is now building with an improving trajectory over the last three quarters," he said.
Morrisons' like-for-like sales, excluding fuel and VAT sales tax, rose 0.1% in the 13 weeks to Jan. 29, its fiscal first quarter.
The small rise masks a drop in volumes when accounting for inflation.
Total revenue was up 3.4% to 4.71 billion pounds.
"Our market share has stabilised, our inflation rate is below our peers, and Morrisons' traditional competitiveness, colour and dynamism is steadily returning to every part of the business," said Potts.
Morrisons has a UK grocery market share of about 9% but differs from its main rivals in that it also has its own production operations, making half of the fresh food it sells.
In January, the group reported a 15% drop in core earnings for 2021-22 but forecast a return to growth in the current year.
Industry data published this week showed UK grocery inflation hit a record 17.5% in March.
($1 = 0.8078 pounds)
Reporting by James Davey, Editing by Kylie MacLellan and Sharon Singleton
Source: Reuters