Wholesale growth drives Morrisons revenue rise

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Revenues at Morrisons surged in the half year to 5 August, helped by its growing wholesale business.

Group like-for-like (LFL) sales excluding fuel were up 4.9% while second quarter group LFL sales excluding fuel were up 6.3% - a nine-year high.

Retail contributed 2.5% and wholesale 3.8%, with retail sales part assisted by the recent favourable weather and the football World Cup.

Revenue was up 4.5% to £8.8bn with underlying profit before tax up 9.0% to £193m.

The initial programme to supply the first 1,300 McColl’s stores was also completed ahead of plan, with Morrisons now expecting to achieve its target of £700m of total annualised wholesale supply sales ahead of its initial end-2018 guidance.

Second quarter wholesale like-for-like supply sales were up 3.8%, up from 1.8% in the first quarter, mostly due to the acceleration in the programme to supply McColl’s.

Morrisons said it still expected to supply McColl’s remaining 300 convenience stores in due course, and that its target of £1bn annualised wholesale supply sales remained unchanged.

The new Safeway range of up to 400 fresh, frozen and ambient products is now available in all of the1,300 McColl’s stores.

David Potts, chief executive, said: “Strong growth, including our best quarterly like-for-like sales nearly a decade, together with another special dividend for our shareholders, shows how new Morrisons can keep improving for all stakeholders.

“Morrisons continues to become broader, stronger and a more popular and accessible brand, and I am confident that our exceptional team of foodmakers and shopkeepers can keep driving the turnaround at pace.”

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