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Morrisons posts lockdown sales boost but fuel suffers 70% hit

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Morrisons has reported a surge in retail sales between February and May, bolstered by lockdown measures. However, with fewer car journeys, fuel sales have plummeted.

The supermarket saw group like-for-like sales excluding fuel up 5.7% in the 14 weeks to 10 May (Q1, 2020/21).

It said trading during individual weeks was “highly volatile”, with stocking up, lockdown, and weak Easter trading all having an impact on the sales data.

However, between weeks 12 and 14 (after lockdown was imposed) sales were up a bumper 10.8%.

But like-for-like fuel sales were down 39% and 70% since lockdown as customers made fewer car journeys.

David Potts, chief executive, said: “We are facing into the unprecedented current challenges and are playing our full part to help feed the nation: working with determination, creativity and pace to serve customers as well as we possibly can.

“The professionalism, enthusiasm and resourcefulness of our frontline key worker colleagues is extraordinary and is showing Morrisons at its very best. I’d like to thank every single colleague: you are Morrisons’ most important and most valued assets and are making a vital difference to so many people and communities across Britain.”

‘Feeding the nation’

In recent weeks, Morrisons has doubled home delivery slots, increased click-and-collect services to near-280 stores by mid-June, introduced 10 different home delivery food boxes, partnered with Deliveroo to deliver groceries in around 30 minutes, and offers a Morrisons store on Amazon Prime Now.

Just yesterday, it announced it had cut the price of unleaded to under £1 a litre.

However, for investors, today’s trading update reveals it is deferring its decision on a dividend pay-out until later in the year.

Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service, said: “The special dividend for 2019/20 that had been anticipated, now hangs in the balance in light of the current situation. It will be disappointing news for shareholders, especially in light of that 10.8% uptick in like-for-like sales in the last three weeks of the quarter, leaving Q1 overall up 5.7% compared to the same time last year.

“If there is one positive from the coronavirus pandemic it is Morrisons’ opportunity to put paid to that downward trajectory it was on at the tail-end of last year, when sales slumped 1.7% and even Christmas failed to raise a cheer.

“As supermarkets and shoppers have adapted to the ‘new normal’ Morrisons has thrived. Caution on going forwards, however, cannot be entirely unexpected. Morrisons, like all the supermarket chains, has had a rollercoaster ride in the past two months, although it has pulled out all the stops it can to ‘feed the nation’.”

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