STRONG sales growth in the first trading quarter for Wm Morrison was powered by a robust performance in Scotland and the south of England, Britain's fourth-biggest supermarket revealed yesterday.
Bradford-based Morrison said like-for-like sales at stores open at least a year rose 8.2 per cent in the 13 weeks to 3 May.
A company spokesman explained: "We are not giving a precise breakdown but Scotland and the south of England had the stronge
st sales growth. It was in double digits."
Morrison, which serves ten million shoppers a week, expanded into Scotland and the south of England from its Yorkshire heartland several years ago with its purchase of Safeway.
Chief executive Marc Bolland said yesterday that a key driver of sales was the group's fresh food "Market Street" format, which includes an in-store baker, butcher and fishmonger.
He said the performance was also helped by 8,000 price cuts in the quarter, a similar strategy to that employed by big rivals Tesco, Asda and Sainsbury.
The robust sales performance, which outstripped consensus City forecasts for a 7.5 per cent rise in underlying sales, saw Morrison's shares close up 2.6 per cent at 254p.
Food retailing analyst Clive Black at broker Shore Capital said: "Such a performance is especially creditable given the tough ongoing comparatives (from a strong sales performance last year] and the easing off of food inflation through recent months."
UBS analysts, however, said price cuts and promotions could signal increased pressure on gross profit margins – before tax – and kept a "neutral" investment rating on the stock.
Morrison said in its statement: "Performance in the first quarter has been in line with our expectations and our financial outlook for the year remains unchanged."
Bolland said sales growth was strongest at the group's "Value" range, but its top-end "Best" range was outperforming other premium lines, signalling the firm was taking custom from upmarket rivals like Marks & Spencer and Waitrose.
He refused to give growth figures for the ranges, however.
The company has so far opened two new stores in this financial year, which will also see the integration of the stores it acquired last year from the Co-op and Somerfield.
Morrison's said it had not neglected corporate social responsibility in its quest for growth, reducing carbon emissions in the past year by 36 per cent – one year ahead of schedule.
Sainsbury's, Britain's third-biggest supermarket giant, posted a 7 per cent rise in underlying sales for the 11 weeks to 11 March.
Market leader Tesco said sales rose 4.4 per cent on the same basis in the six weeks from 1 March.
Supermarket closes final-salary pensions to existing membersMORRISONS yesterday became the latest company to close its final-salary pension scheme to existing members.
The group said it was replacing its final-salary scheme with a career-average plan.
Pensions for the scheme's 10,000 members will now be based on their average earnings during their time with the group, rather than their pay immediately before they retire.
Morrisons' announcement comes the day after BP revealed it was closing its final-salary scheme to new members.
Barclays has said it is shutting its final-salary pension altogether and transferring its 18,000 staff members to a hybrid scheme instead.
The majority of companies have already closed their final-salary schemes to new members, replacing them with less generous defined- contribution options. Under these, the individual shoulders the risk of investment volatility and rising life expectancy.
Morrisons said: "We are now in position to conclude the process of putting our defined benefit pension schemes on to a sound financial footing for the long term."
The change is part of moves by the group to put its pension on a more sustainable footing, including injecting £200 million into the scheme and reducing its exposure to equities. Morrisons' scheme was already closed to new members, and the changes outlined yesterday will only apply to new benefits accrued by existing members.
Pensions expert Dr Ros Altmann said: "If anyone was still in doubt as to whether these schemes had a viable future, the latest announcements should have removed the uncertainty."
