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Morrisons delivers strong results

Surging sales of shimmering macaroons and better service have helped the once-troubled Wm Morrison to record its strongest Christmas performance in seven years.

The Bradford-based grocer has raised its full-year profit forecast again after strong demand over Christmas pushed its like-for-like sales, excluding fuel, up by 2.9 per cent in the nine weeks to January.

In a sign that a turnaround is well under way at Morrisons, total sales rose by 2 per cent during the period, the first increase since November 2013, despite a number of store closures last year.

Potts, the chief executive who was parachuted in after his predecessor was sacked following a poor Christmas, said that full-year profit would range between £330 million and £340 million. The increase in profit expectations is significant because the grocer had upgraded the numbers only last month, when its consensus figures edged up from £321 million to £326 million.

The former Tesco executive said that its market-beating performance was a result of sticking to good retailing basics, such as improving stock availability and service levels while remaining competitive on price.

This was also the first Christmas for Morrisons’ premium range, Best, and Mr Potts said that it was striking the right note, with customers buying products such as smoked salmon with gold lustre, adding: “We sold 50,000 packs of shimmering macaroons, which doesn’t sound like a bang-on Mozza’s product does it? But people were looking all over our shops for it. Over half of our customer baskets included at least one Best item.”

Online sales contributed, accounting for 0.6 per cent of its 2.9 per cent comparable growth.

James Grzinic, at Jefferies said that a “winning Morrisons” was the best-positioned UK grocer, adding: “This sets up the group well for the industry headwinds of 2017, including a more stressed consumer and input price pressures.”

Morrisons shares closed up more than 8½p at 246p.

Source: - 11 January 2017