Morrisons to trial convenience stores

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Morrisons: convenience store trial

Morrisons, the UK’s fourth largest supermarket, is to trial a new convenience format in the first half of 2011.

The retailer is also investigating the opportunities for Morrisons online – it is the only grocery retailer in the top four, which does not have an online presence.

Morrisons is keen to get a slice of the convenience pie, which has been outfperforming the total grocery market for some time.

Figures from the IGD show the convenience sector accounts for 20.9% of the total UK grocery market and increased in value by 6.3% to £30.9bn in the last 12 months. It is forecast to rise to £41.3bn by 2015.

Meanwhile figures from Kantar Worldpanel for the 12 weeks ending 8 August 2010, show smaller stores have enjoyed  8.4% year-on-year growth in this latest sales period versus 4.5% growth in the total grocery market.

Morrisons is also planning to unveil initiatives to emphasise its fresh food credentials and strengthen its own label brands.

The news accompanied the retailer’s interim results announcement for the 26 weeks ended 1 August 2010.

Total turnover was £8.1bn, an increase of 9.1% compared to the prior period. Excluding fuel, store turnover was up 5.8%, comprising a like-for-like increase of 0.9% and a contribution of 4.9% from new stores.

Profit before tax was down to £412m from £449m last time, largely down to an exceptional pensions credit in the previous period. Underlying profit before tax was £410m, compared to £359m in the prior period, an increase of 14%.

Morrisons said the squeeze on consumer disposable income was reflected in a marginally lower (0.2%) basket spend in like-for-like stores, although it saw a 1.1% increase in the number of customers visiting these stores. Overall, including customers visiting new stores, there was an 8% increase in total customers with a record average of 11.1m visiting its stores each week.

Morrisons added the fresh products offered in Market Street continue to perform well, and it has continued to capitalise on its vertically integrated structure with the operation of its own food production facilities.