Morrisons says that its online sales more than tripled during the peak trading period – from November 1 to January 3 – and that its growing ecommerce business is already profitable.
The supermarket, ranked Top100 in RXUK Top500 research, now sells through a variety of online channels, from its own morrisons.com website that depends on Ocado technology and fulfilment, to the Amazon website where its products are now sold for same-day delivery. In recent months it has added a range of new services designed to meet new forms of demand during the Covid-19 pandemic.
“Store pick home delivery, click and collect, our relationships with Deliveroo, food boxes and our doorstep delivery service are all new for Morrisons,” the supermarket said in a trading update today. "We are still learning and growing online, but it is already profitable and we expect it to become more so as we continue to develop our offers for customers.”
All have helped to boost group sales over Christmas and New Year, which grew by 9.3% on a like-for-like basis and excluding fuel.
In the first 22 weeks of the second half of its year, LFL group sales excluding fuel rose by 8.1%, as retail sales rose by 7.2% and wholesale by 0.9%. Sales in the third quarter – between August 3 and November 1 – were up by 7.1%, on the same basis, and in the first nine weeks of the fourth quarter – to January 3 – sales have risen by 7.3%, with online sales more than tripling over the period. Over the three weeks of Christmas and the New Year LFL sales, excluding fuel, are up by 8%. Morrisons’ wholesale supply to retailers including McColls and Amazon is also profitable and grew by 24.4% LFL in the fourth quarter to date. More McColls stores are expected to become Morrisons Daily shops after “significant” LFL sales growth.
Sales grew as Covid-19 restrictions kept Morrisons’ customers at home both during the second lockdown and over Christmas. The supermarket says shoppers bought earlier for the festive period and focused on traditional seasonal food, with champagne sales up by 64% over Christmas, and whole salmon sales up by 40%. Its new doorstep delivery service for the vulnerable, elderly, and isolated completed more than 35,000 orders in the two weeks before Christmas.
Morrisons chief executive David Potts says: “The pandemic has had a severe effect on people and communities around Britain for nine months now but it has been especially hard at Christmas time. I’m very pleased with the way the Morrisons team has helped our customers across the nation enjoy their Christmas in the best way they could - with safe shopping, great service and outstanding stores even in the most difficult circumstances. But I’m even more proud of the broader contribution that the Morrisons team has made to the communities we serve - through foodbank donations, doorstep deliveries to the vulnerable, discounts for key workers, the work of our 500 community champions and the countless small acts of kindness that have made a particular difference this year.
“We will carry on listening, responding and growing, and take all the positive learnings and momentum of the most challenging of years into what we believe will be a better 2021 for all.”
Looking ahead, Morrisons says it expects full-year pre-tax profits to be in the range of £420m to £440m, before it pays back business rates relief of £230m. It also expects that extra Covid-19 costs during the year will come to about £280m - although that figure is likely to have been calculated before yesterday’s announcements from England, Wales and Scotland of a third lockdown.
Aldi said this week that ecommerce played an increased role in its business over the Christmas period. The supermarket said sales in the four weeks to Christmas Eve were up by 10.6% on the same time last year. Online sales in its wine and special buy categories grew by 75% in December compared to the same time last year. And “thousands” of shoppers also opted to buy online for collection from its new click and collect service and for home delivery via Deliveroo. Appetites grew for premium products during a Christmas that most spent in smaller groups and at home as a result of Covid-19 restrictions.
Giles Hurley, chief executive of Aldi UK, says: “We had a record Christmas with unprecedented demand for our award-winning products as customers pushed the boat out more than ever before.
“We are expecting significant sales growth this year as we open new stores and bring Aldi to more locations across the UK. With the vast majority of our grocery products now coming from British suppliers, our growth will lead to additional jobs and investment in our UK supply chain.”
The supermarket, which employs more than 36,000 people at more than 900 UK stores and is ranked Top500 in RXUK Top500 research, now says it will spend another £3.5bn a year with British suppliers by 2025.