Morrisons poised for online launch after in-line third quarter

7th Nov 2013 07:09

- Q3 in-line and guidance maintained- Like-for-like sales down 2.4 per cent- Convenience stores doubled, online poisedLike-for-like sales fell but total turnover increased in line with expectations for the third quarter at Wm Morrisons Supermarkets, which progressed with manoeuvres to catch up with its rivals in convenience and online. In the 13 weeks to November 3rd, total store sales excluding fuel climbed 1%, though like-for-like sales decayed 2.4%.This was a "tough" quarter that reflected a general slow-down in industry volumes, said broker Jefferies, where the non-repetition of 2012 couponing activity also weighed.The FTSE 100 grocer bemoaned its low exposure to convenience and online, the key growth engines for its competitors, as weighing on its own expansion.To remedy this, Morrisons more than doubled its nascent convenience store estate from 33 to 69, opening three new stores a week, and made further preparations to enable the launch of its online offering with Ocado in January as planned.Chief Executive Dalton Philips said: "We continue to grow our sales in this tough market whilst making great progress on our strategy to be a multi-channel retailer."He said early in the New Year the first vans delivery good ordered online will set out in Warwickshire, followed soon after by Yorkshire, with expectations that the service will span "50% of UK homes" by the end of 2014. Morrisons confirmed current trading conditions were depressed by subdued consumer confidence and heavy promotional competition between the big supermarket groups. On outlook, the group said it expected the market to remain challenging for the remainder of the year and pledged to continue to manage the business tightly, with its financial outlook for the full year remaining unchanged.Jefferies said it expected the outlook for the rest of the year on an improving trend: "We continue to forecast a much improved trade performance in quarter four as market share momentum has picked up strongly through the quarter and we assume a less pressured industry volume picture over the key Christmas trading period."The broker said Morrisons was also "likely to remain range-bound" through Christmas, but it expected emerging free cashflow attractions to be further underpinned by the upcoming property review and a largely completed IT revamp. OH