Morrisons outpaces big four rivals as it finally returns to sales growth

Although it achieved only modest sales growth of 0.1% for the period, the Bradford-based retailer returned to growth for the first time since December 2013. It also arrested a decline in market share as it maintained its 10.9% grip of the UK grocery market.

The return to growth follows a shift in its advertising during May, as well as a series of customer focused changes in stores including the return of popular manned express checkouts and the removal of unpopular misty veg machines.

Morrisons chief executive David Potts, speaking to Marketing Week earlier this month, said that he would ensure that future advertising was led by listening more closely to its core customers.

And, a few weeks later, evidence of this strategy emerged when Potts revealed the first ad of his tenure, which promoted the return of the checkouts and playfully pleaded “baby come back” to customers.

“A committed core of loyal Morrisons consumers is responding positively to recent initiatives and business has been boosted by online sales,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

“Morrisons’ performance is an improvement on what was a difficult May 2014, so this is the only first step in any future recovery.”

Big four slide

In comparison to Morrisons, the rest of the big four all recorded a fall in sales as the overall supermarket sector continued to slow with total sales up just 0.2% compared to the previous year.

Despite an improved start to the year, Tesco saw sales fall 1.3% and its market share drop 0.4 percentage points to 28.6%.

There was also more woe for Asda, which saw its sales fall 2.4% as Kantar said its “lower prices were not sufficiently offset by increased footfall.”

Sainsbury’s, meanwhile, saw its sales fall 0.3%. However, it maintained its market share of 16.5% and is now close to overtaking Asda to become the UK’s second biggest supermarket according to the figures. Asda’s share fell 0.5 percentage points to 16.6%.

The German discounters also continued their ascension, with Lidl the standout performer as it achieved a new record high market share of 3.9%, up from 3.6% last year. Kantar said this had been achieved by Lidl growing its average basket size.

Further proof, it claimed, that UK consumers were “demonstrating a willingness to do bigger shopping trips at the discounters.” That could be a potential blow to Tesco’s CEO Dave Lewis, who recently claimed consumers were abandoning the discounters to return to doing big grocery shops at the supermarket giant.