LONDON — Supermarket Morrisons had a very merry Christmas.
The mid-market retailer has had a torrid few years of falling sales and collapsing profits, but announced on Tuesday that it had its best Christmas in seven years.
Sales, not including fuel, were up 2.9% for the nine weeks to January 1, or up by 4.7% if you include petrol. The total number of transactions at the supermarket’s stores also rose 5.2%.
As a result, Morrisons is telling investors to expect a forecast-beating profit for the year. Analysts have predicted an underlying pre-tax profit of £326 million ($395 million) for the year, but Morrisons says the figure is now likely to be between £330 million and £340 million.
Morrisons shares have jumped at the open in London on the back of the update, climbing over 4% at just after 8.00 a.m. GMT (3.00 a.m. ET):
The performance marks a high-point for CEO David Potts, who was brought in to turn around the ailing supermarket in mid-2015. Ken Odeluga, a market analyst at City Index, said in an email on Tuesday morning that the results “reaffirm [Morrisons] transformation last year from an ‘also ran’ into a serious threat to rivals like Sainsbury’s.”
He adds that the supermarket “sets a high bar for supermarket Christmas sales,” with Tesco and Marks & Spencer reporting later this week.
Potts says in Tuesday’s statement:
“This Christmas we made further improvements to the customer shopping trip. We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system. Both like-for-like and total sales grew, which was very encouraging.
“Eighteen months ago I said that this would be a colleague-led turnaround, and our improving performance is entirely due to the continuing hard work of the Morrisons team of food makers and shopkeepers. I would like to thank all colleagues for making Christmas and New Year extra special for our customers.”
Morrisons’ strong sales figures come on the same day as figures from the British Retail Consortium (BRC) show sales rose by 1.7% in December, a performance it calls a “strong finish to a rollercoaster year.” BRC CEO Helen Dickenson said in a statement that food sales were a “major contributor,” with total food sales rising by 2.4% compared to a year earlier.
Morrisons highlights fruit and vegetables, beer, wine, spirits, and its Nutmeg clothing range as top sellers in the run-up to Christmas.
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