Sharp slowdown in sales growth at Morrisons as shoppers change habits
Britain's fourth-biggest supermarket chain saw weaker growth than in the same period last year though it held its prices.
Tuesday 8 January 2019 19:51, UK
Morrisons has reported a sharp slowdown in sales growth at its stores over Christmas as cautious customers held back on spending amid "a feeling of uncertainty in the country".
Britain's fourth-biggest supermarket group said like-for-like retail sales rose 0.6% in the nine weeks to 6 January compared with the same period last year amid a "change in consumer behaviour".
That compared to growth of 1.3% in the preceding quarter and 2.1% over the Christmas period to January 2018, though it was better than some analysts expected.
Shares ended the day down 3%.
Morrisons chief executive David Potts told reporters: "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 update came as industry data from Kantar Worldpanel showed grocery sales grew at their slowest pace for 21 months in the 12 weeks to the end of December, though it said much of this was as a result of lower inflation.
Morrisons said: "As has been widely reported, there was a change in consumer behaviour during the period.
"We were again more competitive, with the price of our basket of key Christmas items the same as last year."
Like-for-like sales including the group's wholesale arm, which supplies Safeway-branded products to convenience stores as well as Amazon, were up 3.6% - better than a year ago though slower than in the previous quarter, and short of analysts' forecasts.
Morrisons chief executive David Potts, who has been credited with reviving the fortunes of the Bradford-based retailer, said: "This is Morrisons' fourth consecutive Christmas of like-for-like sales growth during the turnaround."
The group said its expectations for full-year financial performance remained unchanged.
Morrisons was the first of the major supermarkets to issue an update on Christmas trading, with figures from Sainsbury's and Tesco due later in the week.
Discount rival Aldi said on Monday it had enjoyed its best ever festive period with sales of nearly £1bn in December and growth of 10% in the week before Christmas as it saw an "influx" of shoppers switching from rivals.
Aldi, together with fellow discounter Lidl, has shaken up the sector by eating away at the market share of the major players and prompting them to compete more fiercely on price.
Morrisons on Monday said it was cutting the prices of 935 products by an average of 20% to try to attract budget-conscious post-Christmas shoppers.
Retailers are widely expected to have come under pressure over the festive period amid stuttering consumer confidence as Brexit approaches.