Morrison reports increase in sales during Christmas

Morrison reports increase in sales during Christmas

	Published : Thu, 12 Jan 2006 02:05 By : James Rowe Print this Story

LONDON: Supermarket chain Wm Morrison Supermarkets Plc. said Wednesday its same-store sales excluding fuel rose 2.8 per cent during the key Christmas period, beating market expectations.

Morrison, which acquired the rival Safeway chain and got into accounting and competition law issues, said profits for the year would be in line with previous guidance, that is, at the bottom of the 50 million pounds to 150 million pounds. However, costs involving store conversions and exceptional costs will take the pre-tax figures into the red.

The company, which sold 155 Safeway stores in the past year, said total sales fell 9 per cent, excluding fuel, though sales at the 380 stores it is retaining rose by 6.1 per cent, or by 4.5 per cent after stripping out fuel.

The company said like-for-like sales in the 220 stores converted from the Safeway format increased by 9 per cent in the six weeks ended 8 January, while the same-store sales for the "legacy" Morrison estate fell 2.9 per cent.

Morrison said the 5.7 per cent sales rise for the 56 converted Safeway stores now in their second year of trading, suggested that the integration is successful and showing results and once the company is out of the current problems, it has strong growth potential.

To ward off redundancy, the company is closing down three distribution depots in Warrington, Aylesford and Bristol. It said the associated exceptional and property and redundancy costs would amount to about 60 million pounds and would be taken this year.

Morrison had acquired Safeway, which has a predominant presence in southern England, with a view to become a national chain so that it can compete with rival Tesco. However, the company has been losing customers, mainly as a result of discontinuation of the Safeway gourmet food lines.

Shares of the company, which have lost 17 per cent of their value in the past year, closed at 196-3/4 pence Tuesday, valuing the company at 5.23 billion pounds.