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Cautious outlook for Morrisons as like-for-likes rise 2.4%

Potential Garden Centre Group bidder Morrisons has today released its quarterly results, advising that its financial position ‘remains strong’.

Grocer Morrisons has revealed a like-for-like increase excluding fuel of 2.4% in the 13 weeks to October 30, despite conditions remaining “challenging”.

The grocer recorded total sales growth excluding fuel of 4.6%, as it attracted a record numbers of customers and outperformed the market.

Morrisons said: “As we anticipated at our interim results announcement in September, the economic environment has remained challenging during the third quarter. Morrisons’ focus on providing top-quality, fresh food and keen pricing, backed by an exciting and innovative range of promotions, has again met our customers’ expectations.

“We remain cautious on the overall economic environment and will continue to manage the business accordingly. Our good performance in the third quarter was in line with our expectations and the Board’s financial outlook for the year remains unchanged.”

Jefferies analyst James Grzinic said: “Over the same period we estimate that the other UK majors have seen like-for-like growth of around 0.5%, so the outperformance at Morrison continues to be very strong.

“Limited exposure to non-food and a superior fresh food offering continue to be key for this.”

In the period Morrisons opened 10 new stores, including its second convenience outlet. It said it is on track to meet its target of adding 600,000 sq ft of new space during the year.

Morrisons said it has made “good progress” on new operating and strategic initiatives designed to generate profitable growth, drive the top line, increase efficiency and capture new growth opportunities.

Morrisons will “update fully” on them at its prelims in March.

The grocer said its financial position “remains strong”. It has extended its borrowing facilities through the conclusion of a $250 million US private placement agreement over 15 years.

Source : Nicola Harrison – Retail Week

10 November 2011
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