Supermarket chain Morrisons has revealed a return to quarterly sales growth for the first time in two years after investing in price promotions to help cash-strapped shoppers.
The group, which was bought by private equity giant Clayton, Dubilier & Rice (CD&R) in 2021, reported a 0.1% rise in like-for-like sales, excluding fuel and VAT, in the 13 weeks to January 29.
It marks the first quarterly sales growth since the three months to January 2021 and an improvement on the 2% decline seen in the previous three months.
Morrisons chief executive David Potts said: “We still have plenty of work to do but momentum in the business is now building with an improving trajectory over the last three quarters and like-for-like sales now in positive territory.”
He added: “Although this has been another difficult period for consumers with inflation still at very high levels, we have continued with our programme of regular and meaningful price investments, enabled by a strong start to our cost-savings programme.”
The group said price inflation across its ranges was “below our peers”, though it declined to give a figure.
It said it was not able to call when the peak in food price inflation might come.
Morrisons put its improving sales performance down to an intense focus on price promotions, having announced a £25 million price cut programme last month.
The figures follow a difficult past year for the group, which was overtaken by discount rival Aldi as the UK’s fourth largest supermarket and saw earnings tumble 15% as sales fell by 4.2% in the year to October.
It saw its credit rating cut by Moody’s in February after recording weaker sales and profits, with the credit rating agency cautioning that its ability to repay its roughly £7.5 billion of debts had moved to “negative” from stable.
But it has been investing heavily in prices and on the McColl’s convenience store business it bought out of administration last year to help turn around its fortunes.
Morrisons said it now has 500 Morrisons Daily convenience stores this week, with the opening of the Phoebe Street store in Salford.
It has also converted 350 former McColl’s stores trading as Morrisons Daily with around 10 new conversions every week.
The group is helping fund this and soaring inflation pressures by slashing costs to save £700 million over the next three years.