Morrisons' transformation continues apace as sales and profit jump

Morrisons has reported a strong rise in sales and profit for its full year 2018-19, as the grocer continues to turn around it fortunes.

The supermarket group said it experienced an 8.6% rise in profit before tax and exceptionals to £406 million in the 12 months to 3 February on the back of a 4.8% increase in like-for-like sales not including fuel.

Revenue for the period jumped by 2.7% to £17.7 billion, and when fuel sales are included revenue was up by 5.1% year on year. The positive figures – the best sales growth since 2009-10 – represent a marked change from just five years ago when the business’s future looked uncertain following significant sales and profit declines.

Andrew Higginson, Morrisons chairman, commented: “In a challenging period for customers and an ever-changing British retail scene, the turnaround at Morrisons has continued to progress well.

“The team has now completed four years of important work, building Morrisons as a broader, stronger business. I am delighted that sales and profit again grew strongly, and that we are able to share that growth with our shareholders through increased dividends."

There is no single factor behind Morrisons recovery in recent years, but a key strategy has been to utilise its integrated supply chain and well-respected food manufacturing capabilities to ramp up its wholesale offering. The grocer described the 12-month period as “an important year for wholesale”, with this department growing quickly to achieve the company’s target of £700 million of annualised year-end sales ahead of plan.

It said the wholesale arm, which most notably supplies convenience chain McColl’s, contributed over 3% to group like-for-likes.

From a technology perspective, the full-year trading announcement detailed continued improvements throughout the 12 months, including the launch of the ‘Morrisons More’ app which allows customers to collect and redeem Morrisons loyalty points digitally.

Through its partnership with Ocado, Morrisons online now covers over 75% of British households – and a recent doubling of the eCommerce team in Scotland will see this figure grow further in the coming months. The start of the current financial year also saw Morrisons begin a trial to supply holiday destination Center Parcs' guests with a delivery service.

Over the course of 2018-19 Morrisons extended its same-day store-pick-up 'Morrisons at Amazon' offer to over 10,000 items, which supports order and delivery within one hour in select parts of the UK. Working with Google, the supermarket says it has made various improvements to its 'My Morri' internal digital communication platform, enabling staff to stay up to date with the latest business activity and information.

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