UK supermarket Morrisons has reported a sharp slowdown in quarterly sales growth, due to tough comparatives with the corresponding quarter last year, which saw the first COVID-19 lockdown.
Morrisons said like-for-like sales, excluding fuel, rose 2.7% in the 14 weeks to May 9, its fiscal first quarter – ahead of analysts' average forecast of up 1.6% but down from growth of 9.0% in the previous quarter.
'Against the volatile trading of the early stages of COVID-19 last year, we sustained a robust sales performance throughout Q1 this year,' the group said in a statement.
Comparing the period with 2019, before the COVID-19 pandemic started to disrupt trading last year, like-for-like sales rose 8.7%.
The group maintained its forecast for 2021/22 profit before tax and exceptionals, including business rates paid to be higher than the £431 million profit achieved in 2020/21, excluding the waived rates relief. It also said it would reduce debt.
"We've had an encouraging start to the year, with positive like-for-like sales and some good momentum across Morrisons both on a one and two-year view," commented David Potts, chief executive. "We said back in March that we expected to grow profits and reduce debt in the current year and I'm pleased to be both reiterating that guidance today and looking forward to a year of meaningful profit growth in 2022/23.
"The pandemic is not yet over, but it is in retreat across Britain and there is much to be positive about as something approaching normal life begins to take shape."
Looking ahead, the group has forecast another year of 'meaningful profit growth' in 2022/23, noting that it has made a 'good start' to the financial year.
Morrisons said it plans to refresh its long-term capital allocation plans when it reports interim results in September.