11th Nov 11
Cheap food boosts Morrisons and Restaurant group
by Harry Oldfield
More reasons: Morrisons on top after sticking to food sales
More reasons: Morrisons on top after sticking to food sales
Supermarket Morrisons and the firm behind the Frankie & Benny’s and Garfunkel’s restaurants are among a small group of companies, focused on good value products, which are faring well amid a more challenging economic environment, revealed results yesterday.
Morrisons reported that third-quarter like-for-like sales had gone up by 2.4 per cent without taking fuel sales into account. Including petrol sales, on which the retailer is renowned for aggressive discount pricing, comparable sales growth hit 5.8 per cent. The company, which has opted not to diversify as aggressively as its rivals into non-food products, claimed earlier in the year that its customer base was expanding as the economic climate got tougher.
It kept its focus on keenly priced food items instead of targeting things such as flat-screen TV sales or pet insurance. Recent deals which the supermarket has offered include reducing the price of a litre of Gordon’s gin from £17 to £15, offering a tin of Quality Street chocolates for £4.99 and lowering the price of a six-pack of mince pies by Mr Kipling from £1.79 to 89p.
The group said that Morrisons’ focus of offering keen pricing and top-quality, fresh food, backed by an innovative and exciting range of promotions, has yet again met the expectations of customers. It acknowledged that trading conditions were challenging but insisted that training remained on track, while reiterating that it expects the environment to be tough “for some time”.
Panmure Gordon analyst Philip Dorgan said that sales in the third quarter show the group’s resilience and strong pricing position. He went on to explain that it is expected to generate quicker sales growth than rival Sainsbury’s in the foreseeable future.
The Restaurant Group, meanwhile, also said that it was making good progress in spite of the tough economic backdrop. It announced that comparable sales were 2.75 per cent ahead for the 44 weeks ending 6 November, indicating slight trading improvement in September and October, said analysts.
The company said that it boasts a distinct marketing position due to its great value-for-money offerings and strong brands. It said that looking ahead to next year, although they expect the tough trading conditions to continue, the team will be working to make sure that the group’s good progress continues.
Many of the Restaurant Group’s restaurants are found in airports, cinema complexes and other non-high street locations where rents are expensive and shopper footfall has declined dramatically. Recent voucher promotions and other offers include 25 per cent off the total food bill on a Monday evening at Frankie and Benny’s, and “Forget the fees: feel the deal”, where students get 25 per cent off at Chiquitos.
The Restaurant Group also revealed that it had reached a deal for new expanded borrowings of £140m over five years, with covenant changes.
Our Stories
- Sandwich labels misleading shoppers
- Unemployment drops unexpectedly but worse still to come
- Tesco store managers see annual bonuses cut
- Royal Mail: half London sorting office to be sold
- Panasonic announces £3.4bn loss
- Thomas Cook attacks government over holidays at home promotion
- Clinton Cards falls into administration
- Wet April sees high street spending fall
- Five tough years ahead for UK jobs market
- Deal struck to save Thomas Cook
- Discount battle leads to sales decline at Morrisons
- Wetherspoon founder: pubs plans to be hit by taxes
Popular Topics
afghanistan al qaeda amazon Apple ASDA bank of england barack obama BBC british airways china david cameron Debenhams Egypt facebook george osborne Google India ipad iphone ivory coast japan Libya London M&S Marks & Spencer Morrisons nhs North Korea Office for National Statistics pakistan protests russia Sainsbury’s South Korea terrorism Tesco Tunisia UK UK retailers UK retail news UK shopping us Waitrose Wikileaks x factorArchive
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- January 2009
