A disappointing Christmas for Morrisons as falling sales hinder previously good progress, says GlobalData

Following today’s release of Morrisons Q3 and Christmas trading figures for FY2019/20, Thomas Brereton, retail analyst at GlobalData, a leading data and analytics company, comments: ‘‘Morrisons, the first of the Big Four supermarkets to report Christmas trading, today announced a disappointing set of results with a 1.8% fall in total sales excluding fuel – mostly due to a 1.7% drop in l-f-l sales.

“Morrisons will find some solace in the fact it was facing a laudable comparative period after a strong performance last year, a grocery market with near-zero inflation, and facing the same politically-related adversity faced by all retailers at the end of 2019. However, retail l-f-l sales fell worryingly far over the 22-week period, and with a Q3 fall of -1.1%, suggests an unsettling fall of c-2.6% over the core 9-week Christmas period. Thus, even with the aforementioned explanations for a trying trading period, Morrisons may be left scratching its head as to why it now appears a grocery laggard after spending much of 2018 and the first half of 2019 as a leader. With GlobalData consumer data showing the number of Morrisons shoppers falling marginally over the period compared to 2018, it is possible that Morrisons found it difficult to successfully vie with competitors – particularly Tesco and Sainsbury’s – that used aggressive promotional tactics (e.g. fuel vouchers) throughout the second half of 2019.

“But in conclusion, Morrisons does not need to overhaul its strategy, management or product ranges. Its focus on expanding its online presence (through Amazon as well as in-house operations) remains the correct strategy, and – coupled with growing wholesale partnerships and savvy store estate management – stands Morrisons is good stead for 2020. Instead, as rightfully stated by CEO Dave Potts, Morrisons should see this disheartening period as an opportunity to “take some learnings into the New Year” and move with momentum into 2020.”