Morrisons enjoys lockdown sales boost, but sees fuel and costs hit

Supermarket Morrisons has posted surging retail sales over a “volatile” first quarter, but revealed a hit from plunging fuel demand amid the coronavirus lockdown.

The Bradford-based chain reported a 5.7% rise in group like-for-like sales, excluding fuel, in the 14 weeks to May 10.

It said group sales jumped 10.8% over the last two weeks of the quarter, with a 9.6% contribution from retail and 1.2% growth in wholesale.

But with tumbling sales on its forecourts included, group sales were 3.9% down in the quarter.

Morrisons said fuel like-for-like sales have crashed around 70% since the UK went into lockdown in late March as Britons have been forced to stay at home.

Morrisons said that the fuel hit and temporary move to close its in-store cafes, as well as surging costs of protecting staff and adapting its business, are likely to weigh on profits over the first half.

The firm cautioned the outlook of the impact of coronavirus remains “uncertain”, though it stopped short of warning over full-year profits.

It added that higher costs from coronavirus are likely to be offset by £228 million in savings from the business rates relief, while it expects fuel sales to bounce back strongly once lockdown begins to end.

David Potts, chief executive of Morrisons, said: “We are facing into the unprecedented current challenges and are playing our full part to help feed the nation.”

First quarter trading saw sales initially boosted by coronavirus panic buying, then impacted by the initial lockdown and weak Easter trading, before seeing a “significant improvement” in recent weeks.

The group has been focusing on meeting soaring demand for home deliveries and has more than doubled its online slots through a significant increase in stores available for order picking, and is launching a new click-and-collect service at nearly 280 stores by mid-June.

Its Morrisons store on Amazon Prime Now is also going nationwide, increasing from 17 stores to over 40 in the coming weeks.