Business

Morrisons sales jump as recovery continues

Morrisons store Image copyright Getty Images

Morrisons, the UK's fourth-biggest supermarket chain, has reported better-than-expected sales for the past quarter, boosted by price cuts.

Like-for-like sales, which exclude new store openings, rose 3.4% in the 13 weeks to 30 April, surpassing the second quarter's 2.9% rise.

The firm said imported food costs had risen due to the pound's fall, but that it had kept prices competitive.

The pound fell sharply following the Brexit vote last summer.

The drop has forced retailers to choose between raising prices or seeing their profits squeezed.

Morrisons chief executive Dave Potts said he was confident that the retailer's turnaround would continue.

Mr Potts has been leading a reorganisation of the supermarket chain over the past two years, since he took over the running of the business from Dalton Phillips in February 2015.

Image copyright Getty Images

Changes have included pulling out of running smaller convenience stores under the M name, as well as a focus on cutting prices.

Morrisons also has introduced a tie-up with Amazon, offering same-day and one-hour delivery services, which it said it had now extended into more London postcodes.

Mr Potts added: "We've been working hard to improve quality and lower prices. We're a bit more relevant to a few more people."

On Wednesday, market research company Kantar Worldpanel said that Morrisons had been the fastest growing of the big four supermarket chains over the past few weeks, helped by its "The Best" line attracting more affluent shoppers.

John Ibbotson, director of the retail consultancy Retail Vision, said Dave Potts' "back-to-basics approach" had transformed Morrisons' fortunes.

"The introduction of the 'Best' premium own brand range and more healthy options has pulled in more affluent shoppers, and the focus on good value, fresh food has successfully driven a wedge between Morrisons and the discounters," he said.

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