WM Morrisons Supermarkets PLC (LON:MRW) has notched up its eighth consecutive quarter of like-for-like sales growth, but there are signs the supermarket is losing some of the momentum built earlier in the year.
Like-for-like sales (excluding fuel) grew 2.5% in the 19 weeks to October 29, although Morrisons had registered growth of 3.4% and 2.6% in the first and second quarters respectively.
READ: Morrison's shares fall as like-for-like sales growth slows in the second quarter
Ahead of Thursday’s announcement, analysts at Barclays had said that LFL growth above 2% would be a “creditable performance” given a more robust Asda and continued strength from discounters Aldi and Lidl.
READ: Morrisons does best of the big four as hard discounters continue to gain share
Including fuel, group like-for-like sales jumped 3.4%.
Margin pressure not easing
The FTSE 100 group hinted that pressure on margins hadn’t subsided, stating that it “worked hard” during the period to limit the impact of lower sterling on imported food prices.
"We are pleased with a further step up in our competitiveness and another period of positive like for like sales growth,” said chief executive David Potts.
“I am confident our plans to keep serving customers better will enable us to continue the strong momentum of the year so far, into the important fourth quarter.
"As we work towards becoming a broader, stronger business, a new Morrisons is taking shape, built by our colleagues on firm balance sheet foundations."
‘More customers buying more’
Britain’s fourth largest supermarket said “more customers continued to buy more” during the period, with its ‘Price Crunch’ and ‘Way Down’ campaigns proving popular with shoppers.
Those two initiatives are part of Morrisons’ wider plan to trim prices and revamp its stores in a bid to keep up with its peers and fend off competition from Aldi and Lidl.
It has recently brought out a new home and leisure range, while the retailer is also growing its Best premium own label range to almost 1,000 products.
As more people order their shopping online and have it delivered to their home, Morrisons said it is extending its catchment area in the North East of England to allow more households access to its home delivery service.