Broker snap: Morrisons coming back to the pack

7th May 2010 13:35

Morrisons has been the star performer in the supermarket sector over the last few years but those days could be drawing to a close. Citigroup warns.The supermarket reported 0.8% like for like growth (excluding fuel and VAT) in the first quarter compared to the comparable period of 2009. The market was expecting growth of around 2%, Citi suggests, while the performance also compares unfavourably with the 4% gain in like for like (LFL) sales in the fourth quarter of 2009.Based on data from market research group TNS, Citi believes that both Sainsbury and Tesco LFL growth is running at around 1% at present and Asda's LFL growth might be flat to negative. "Morrison is no longer outperforming the sector to the degree we have become accustomed to over the last two years," Citi analyst Alastair Johnston said."Total sales growth was 5.9% (consensus 6.5-7%). The new space contribution will tend to trend down a bit for the rest of the year as the purchase of the Coop/Somerfield stores last year is cycled," Citi notes.