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Morrisons first-quarter sales lift as it responds to Covid-19 with fast online expansion

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Morrisons today showed how first quarter sales lifted as the retailer responded to the “unprecedented challenges” of Covid-19 with measures including the fast expansion of online shopping. 

The retailer has more than doubled its capacity to deliver online orders to customers’ homes, and will have a new click and collect service at almost 280 stores by the middle of June. As recently as March, this service was being trialled through just six stores and now serves much of the Midlands as well as Edinburgh, Cardiff, Bristol and Portsmouth.

Morrisons has also introduced telephone ordering for doorstep delivery at all of its shops for the most vulnerable and elderly customers, and teamed up with Deliveroo to deliver groceries in as little as 30 minutes by courier from 130 Morrisons shops. Click and collect food boxes are being delivered to hospital car parks, while 10 types of home delivery box have been introduced. These initially provided essentials for the vulnerable and self-isolating but have now expanded into new options. In coming weeks, Morrisons’ Amazon Prime Now store will go nationwide, with deliveries from more than 40 shops in coming weeks, up from 17 previously.

These are just some of the steps that have meant taking on more than 25,000 new staff across its in stores, manufacturing, supply chain and in online and home delivery as it expands capacity “significantly”. No members of staff were furloughed, and around 3,000 small suppliers are receiving immediate payments.

Across the group, like-for-like sales – excluding fuel – rose by 5.7% in the first quarter – the 14 weeks between February 3 and May 10 – and by 10.8% alone in weeks 12 to 14, when the retail contribution was 9.6% and wholesale contribution was 0.9%. Total sales rose by 5.7% excluding fuel, and by 4% including fuel.

The retailer, ranked Top100 in RXUK Top500 research, said lockdown started in week eight, when trading hours were reduced and social distancing and reconfiguration measures were introduced. In-store customer numbers were capped and only every second checkout was opened. As a result, retail’s contribution to like-for-like sales was negative between weeks eight and 11. Since then, more normal trading hours have resumed, with screens added at all checkouts, while customers are adapting by spreading shopping trips through the week, rather than just at weekends. 

Morrisons chief executive David Potts 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.”

The retailer said it had protected staff through adding screens at tills, pharmacies and customer service areas, through social distancing measures including marshal-controlled entry and reconfigures customer flow at all stores. Store staff can use hand sanitiser, gloves and masks, while the contactless in-store payment limit has ben lifted to £45 from £30. More cleaning is taking place, while in-store cafés, food-to-go and service counters are all closed temporarily.

The quarter was previously extended to 14 weeks to allow for the later May bank holiday this year. The second quarter will be 12 weeks and will be reported in first-half results in September.

Image courtesy of Morrisons

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