Partly driven by a well-received ad campaign, Morrisons posted like-for-likes sales up 3.7 per cent in the 14 weeks to November 4, an increase against the first seven weeks of the second half when like-for-likes rose 3 per cent.
Oriel Securities analyst Jonathan Pritchard said: “It is clear that the ad campaign is working and driving footfall. While we think there is still more work to do to get the Morrisons stores looking right, there has been material progress.”
Citi analyst James Anstead said Morrisons’ core stores appeared to be growing again and would benefit from new branding over the next eight months.
Shore Capital analyst Clive Black also gave Morrisons’ the thumbs up, but questioned how sustainable its high spending on advertising was, and whether it was vulnerable to a potential renewed price onslaught by rival Asda.
“We do harbour some concerns that industry pricing could be sharper in the new year if Asda continues to suffer at Morrisons’ hands,” he said.
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