Morrisons has today updated investors on full year trading for the 52 weeks ending 30 October 2022.
With continued high food inflation, rising interest rates, an ongoing cost of living crisis and the war in Ukraine set to enter its second year, there is a continuing sense of uncertainty in consumer sentiment.
Group revenue for the year was up 2.2% from £18bn last year to £18.4bn and Group LFL sales, excluding fuel, were down 4.2% but on a steadily improving trend over the last two quarters. This sales momentum continued into the new financial year with sales in the three weeks before Christmas up 2.5% on last year.
Looking through the pandemic, on a three year basis, Group LFL sales excluding fuel were up 2.6%, and up 3.4% including fuel. Adjusted EBITDA was £828m, at the top end of the guidance given at Q3.
CEO David Potts (pictured) stated, “In a very difficult period for consumers and businesses alike, we are continuing to do everything we can to keep prices down for customers and to support our colleagues.
“As a vertically integrated retailer, we felt the impacts of last year’s racing inflation more immediately than our competitors and this did have an impact on our pricing position. However, since October we have executed a rolling programme of meaningful price cuts, price freezes and fuel promotions for our customers and our competitive position has considerably sharpened.'
He continued,' I’m particularly pleased with the impact of the changes to our entry level range in early January with over 130 Savers prices cut and the range increased, which has been really popular with our customers.
“Our Christmas trading continued the positive momentum of the last two quarters with a 2.5% increase in sales against last year, as we pulled out all the stops to help our customers celebrate with style and great quality, despite the economic uncertainty.'
Outlook
During 2022/23, the group expects continued cost and other inflationary headwinds, but is confident that improved trading momentum and its various cost saving programmes will more than offset these, and expect EBITDA to be up year-on-year.
In addition, the company identified several working capital opportunities and is now planning for an improvement of at least £500m in the medium term.
David said, “Looking ahead, this current year has many opportunities. We have clear plans in place to continue to invest in price and in hours in our stores; to open new supermarkets and further refresh the core estate; to invest in McColl’s and accelerate the conversion programme; to develop further the fast-growing My Morrisons app and to grow volumes through our unique food making operations around the country.
'Together I’m confident that these moves will enable us to make further significant progress in developing Morrisons into a broader, stronger, more accessible and more popular business.'