Britain’s fourth largest supermarket chain has gained substantially in the number of customers, but not in overall retail sales, according to their latest trading update. Morrisons reported an increase of around 80,000 customers per week in the six weeks up to January 2012, but like-for-like sales rose only 0.7% as opposed to the anticipated 2% or more.
Finance director Richard Pennycook said that the government needs to think hard about raising the fuel duty again. He has suggested to the Chancellor that customers are paying too much for fuel already – funds that they could be using for other necessities, like food. He noted that the average customer paid nearly £500 more for petrol than they did the previous year.
At the same time, however, Morrisons had the best year ever in 2011, with sales up by 1.8% on average for stores open at least a year. Revenue increased to £17.7 billion for the year, and the final dividend to shareholders, according to a company statement, will be 7.53p, up 11p to 10.7p per share.
CEO of Wm Morrison, Dalton Philips, said that customers are struggling with economic issues, but Morrisons was up to the challenge of providing value for money in tough times. One part of that strategy will be the opening of a number of new M convenience stores for local communities. With good results from their initial M stores, they plan to to expand the opportunities for shoppers.
The company has found that the convenience market is growing twice as fast as other retail businesses in the UK; it makes up about £30 billion of total sales, and about £1 out of every £5 spent on grocery items. The M convenience stores are a good option for many people who need a few items in a hurry and don’t want to make the trip to the nearest large supermarket.
They offer an extensive range of fruits and vegetables, meat, fish, bakery and deli products – about 2,500 lines in all, and they are by definition a kind of quick fix for lunch or dinner, and for household staples. Morrisons anticipates that customers looking to spend less per shopping trip for both food and fuel will find them an attractive alternative.