Morrisons Christmas sales dampened by 'cautious' shoppers

Supermarkets chain Morrisons found itself out of favour in the City on Tuesday after it admitting it had a lacklustre Christmas.

The grocer said its 3.6% increase in comparable sales for the nine weeks to January 6 had been its fourth consecutive Christmas of growth.

However, the biggest chunk of that came from its wholesale business, which supplies food to convenience stores group McColl’s and Amazon.

Sales from its supermarkets rose 0.6%, compared with 1.3% in the previous quarter and 2.1% over the Christmas period last year. Although the figure was better than some analysts expected, the shares fell 3.5%, or 7.8p, to 211.8p.

The slowdown was mostly down to shoppers’ changing habits, chief executive David Potts said. He added: “Going into November there was just a sense that customers were a bit more cautious, a bit more careful with their spending. A feeling of uncertainty in the country may have led to some of that feeling.”

The grocer is still benefiting from its agreement to supply McColl’s, which began in January last year. But the sales momentum that Morrisons has seen during its four-year turnaround could tail off, some analysts believe.

Morrisons was the first of the Big Four supermarkets to update the City, with figures from Sainsbury’s, Tesco and Marks & Spencer out later in the week.

Although the grocers grew 1.6% in the 12 weeks to December 30, it has been the sector’s slowest rate since March 2017, industry data from Kantar Worldpanel showed today.

Asda, which is being bought by bigger rival Sainsbury’s, was crowned the winner among the Big Four in the crucial Christmas trading period. But all chains lost market share to discounters Aldi and Lidl.

Asda’s sales rose 0.7%, Tesco was up 0.6%, while sales at Morrisons edged up 0.1% and Sainsbury’s fell 0.4%.