Morrisons like-for-likes excluding fuel and VAT rose 4.1% in its second quarter as the retailer cut down debt by 35% on peak levels.
The supermarket flagged a “solid quarter of progress”. Total sales excluding fuel edged up 3.4% to £3.8bn as underlying EBITDA for Morrisons’ first half surged 16% to £321m.
Following the £2.5bn sale of its petrol filling stations to MFG, Morrisons completed its debt reduction tender in June and has cut group debt by 35% to £4bn from a peak of around £6.2bn.
New CEO Rami Baitiéh, who joined Morrisons from Carrefour last year, said that he was pleased with its performance as supermarkets, convenience, wholesale and online all delivered growth over the second quarter.
He said the retailer was focused on three pillars of its strategy: commercial excellence, operations optimisation and new value creation.
“It is clear that availability and our loyalty scheme are the two areas our customers talk about the most and so we are focusing intensively on these areas,” he added. “Customer reaction to the significant investments we have made in the More Card has been very positive.
“We now have over five million active customers, and transactions using the card have grown by around 35% in the last eight months. We are now targeting 70% of transactions to be through the More Card over the medium term”.
He also flagged that its Aldi and Lidl Price Match, which it introduced in February, was off to a “great start” and is “giving customers increasing confidence in the competitiveness of our prices across the shop”.
Elsewhere, convenience has remained an “important and strongly growing” channel for the retailer. Bolstered by the completion of the McColl’s conversion programme and its recent acquisition of 38 c-stores in the Channel Islands, the supermarket now has more than 1,600 Morrisons Daily convenience stores.
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Morrisons chief financial officer Jo Goff added: “This has been another solid quarter of progress with sales and volume improvements right across the business. Our debt has now reduced by over a third and we made further progress on our cost savings programme with £78m delivered in the quarter, taking the total since the start of this year to just over £450m, in line with our £700m three year target.”
The supermarket is celebrating Morrisons’ 125 year anniversary this year. “This important milestone is a great platform to remind customers of the timeless values that Sir Ken [son of founder William Morrison] built into the company and how our Market Street counters and our 18 food making factories set Morrisons apart. Embracing, preserving and enhancing his legacy is the foundation for building the Morrisons of the future, ” said Baitiéh.
The grocer launched a TV campaign celebrating the anniversary last week called ‘over the counter, over the years’ advert, which shows a conversation between Morrisons staff and customers, played out over 125 years.
The advert begins at the company’s original Bradford market stall, with a shopper buying local eggs. With each cut, the film moves through time to a new decade, continuing the conversation between the shopper and worker while capturing the fashion, hairstyle and food choice trends of each era.
Throughout the film, customers are seen purchasing fresh British food including mature British cheddar, sliced loaves and British Sirloin steaks, before it concludes with a customer buying doughnuts from a modern-day Market Street counter.
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