(Alliance News) - Grocer Wm Morrison Supermarkets PLC on Tuesday reported a strong start to its financial year amid a supermarket "renaissance".
Against volatile trading a year ago during the onset of the Covid-19 pandemic, Morrisons said it sustained a "roust" sales performance throughout the first quarter of its 2022 financial year. Total sales rose 5.3% including fuel in the 14 weeks to May 9, while like-for-likes were up 4.7%, with fuel volumes "almost back" to pre-pandemic levels by the end of the period.
Excluding fuel, like-for-like sales were up 2.7% year-on-year and two-year sales - being a comparison against a pre-pandemic period - were up 8.7%.
Morrisons highlighted that key seasonal events such as Mother's Day and Easter were particularly successful, and there has been a strong recent improvement in food-to-go sales.
"During the pandemic there has been a renaissance of the supermarket in Britain and customers are enjoying cooking at home more. Customers have also embraced shopping online, and both Morrisons.com and Morrisons on Amazon are now complementing our supermarkets well," said Morrisons, noting first quarter online sales more than doubled.
The grocer incurred a further GBP27 million of Covid-19 costs in the quarter, in line with its expectations. These costs were mainly incurred due to extra colleague absence and more marshals during the first few weeks of 2021 when the second Covid-19 wave was still prevalent and Britain remained under strict lockdown.
Given the strong start, Morrisons retained its full-year profit guidance. However, it is "now confident of a year of meaningful profit growth" for the 2023 financial year.
The company held its pretax profit before exceptionals guidance for financial 2022, saying that it expects it to be higher than the GBP431 million Morrisons would have achieved for the year to the end of January, had it not waived the GBP230 million business rates relief.
Also, Morrisons said it plans to open two new stores in Kirkby and Chelmsford, and two temporary replacement stores in Camden and Little Clacton. As previously guided, the company confirmed that it expects net new space sales contribution to be around 0.2%.
"We've had an encouraging start to the year, with positive like-for-like sales and some good momentum across Morrisons both on a one and two-year view. We said back in March that we expected to grow profits and reduce debt in the current year and I'm pleased to be both reiterating that guidance today and looking forward to a year of meaningful profit growth in 2022-23," said Chief Executive David Potts.
Morrisons shares were trading flat in London on Tuesday morning at 183.10 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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