Struggling supermarket chain WM Morrison (MRW) has made a "solid" start to the year, according to management. Sales still fell, but they did so at a slower rate than previously. First quarter total sales rose 0.6 per cent, but like-for-like sales, excluding fuel, dipped 1.8 per cent, compared to a 4.1 per cent slide in the fourth quarter of the last financial year.
While management calls this "steady improvement", chief executive Dalton Philips conceded there was still a lot of work to be done. And the scale of that challenge is huge. Sales might have improved, but they're still falling, which indicates that the supermarket is still struggling to give consumers a reason to shop at its stores. Much of that is down to Morrisons lacking an online grocery channel and being slow to introduce convenience stores when its competitors have been trading online for years and have well-established convenience outlets across the country. During the quarter, Morrisons opened two such 'M Local' convenience shops and the plan is to have 100 stores operational by the end of the year, with 20 in the first half. Mr Philips said the "real" opportunity for success in the convenience channel lied within the M25.
As for online shopping, this will begin on 31 January 2014, regardless of whether or not a deal is struck with Ocado, with whom Morrisons is in discussions. Ocado has confirmed that any agreement to help Morrisons facilitate an online business would be complementary to Ocado's existing partnership with Waitrose. It said that relationship would be unaffected by a potential agreement with Morrison, and that Ocado customers will continue to buy exclusively from existing Ocado, Waitrose and branded ranges. It also dismissed the possibility of Morrison taking a stake in the business or launching a takeover.
In terms of Morrisons' product sales, revenue from fresh fish rose 10.5 per cent, and meat rose 4 per cent. Mr Philips said the fresh food category was where Morrisons has made the biggest inroads. But, he added, there was more work to be done in other areas which are "lagging behind".
