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12 May 2020

Morrisons’ sales boosted by lockdown

Saul Fulda, Investment Analyst

Morrisons has followed in the footsteps of its fellow supermarkets in delivering a positive quarterly performance - retail like-for-like sales rose by 5.1% in the first quarter, with the final two weeks yielding a bumper 9.6% increase.

Morrisons has taken precautionary measures to protect customers and employees by installing protective screens around the tills while bonuses for frontline staff have increased threefold and NHS workers are given priority service. 

The supermarket giant has expanded its partnership with Amazon Prime, which has seen its same-day home delivery service skyrocket, while also working with Deliveroo to offer grocery deliveries within 30 minutes. These steps are encouraging and demonstrate Morrisons’ enthusiasm to develop its online presence and its preparations for the loosening of the Ocado partnership, with the latter due to team up with Marks & Spencer in September.  

However, the picture is not all rosy. Like-for-like fuel sales were down 39.3% in the first quarter, and when fuel is included into the total calculations, total sales were 4% lower than last year. With 6.3% of Morrisons’ shares loaned to short sellers - who capitalise on a stock falling - many institutional investors believe that the supermarket chain has overrun its race. 

While the outlook remains uncertain and sales continue to be volatile in the short term, Morrisons’ partnership with Amazon should support future growth opportunities, while the slowdown in public transport usage could support fuel sales moving forward. 

Please note that investments and income arising from them can fall as well as rise in value and you may lose some or all the amount you have invested. Past performance and forecasts are not reliable indicators of future results or performance. Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the companies mentioned.
 
Morrisons’ sales boosted by lockdown
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