Morrisons posts 1.3% like-for-like growth in third quarter

The retailer said the performance was “in line with market growth” during the period, when there was a “slight increase” in retail price inflation and like-for-likes advanced 1.3%.

Finance director Richard Pennycook said the company had expected its growth to slow and fall more in line with the market average. “Volumes are not growing dramatically but they’re not declining either,” he said.

Morrisons opened seven shops, including one replacement, in the period to October 31 and said it was on track to add 400,000 sq ft of space this year.

Pennycook said the company was cautious about the outlook for next year, and will be extending its Christmas collector card scheme into January to help customers following the January 4 VAT increase. He said Morrisons hadn’t seen the return of trading up which Tesco and Sainsbury’s claim to have experienced.

“We’re not seeing it as a rule,” he said. “The only exception is we expect to see trading up over the next six weeks in the run up to Christmas, but very much expect it to go back to a focus on value in the New Year.”

Shore Capital analyst Clive Black said the like-for-like performance was in line with expectations but the contribution from new space was “subdued”. The broker cut its second-half sales growth forecast from 5.4% to 3.5%.