Morrisons CEO admits Christmas ads 'worked well' as it posts slight sales growth
UK retailer Morrisons' like-for-like Christmas sales were up by 0.6% on 2017 claimed chief executive David Potts in a trading update today (8 January).
The spot from Publicis London called 'Christmas, Morrisons Makes It' was released 14 November
Potts admitted that consumers believed the “ads worked well” and were very on-brand. He caveated this: "With advertising, you’re never quite sure, but so far, so good."
Discussing performance in the nine weeks leading to 6 January, he outlined that the retailer had seen its fourth consecutive year of like-for-like sales growth at Christmas.
He said: “Our performance shows colleagues are listening hard and responding to customers, providing consistently great value and good quality when it matters most. I would once again like to thank the whole Morrisons team for what they continue to do for our customers.
“Morrisons is well set to keep improving the shopping trip and become more and more relevant for more customers.”
The spot from Publicis London called 'Christmas, Morrisons Makes It' was released 14 November.
In it the retailer showed off its butcher, fishmonger, bakery and flower stall as an ideal Christmas stop-off, touring the store and taking a stop at a family dinner where a mother is quizzed by her son about Christmas wishes being fulfilled.
A second spot also outlined how the supermarket caters to those with food allergies and specific dietary requirements.
Playing much into the Greggs vegan sausage roll narrative which has been playing over the last week, the retailer said 55,000 packs of veggies in blankets were sold. additionally, it claimed it had doubled sales of reduced, 'wonky veg'.
Thomas Brereton, a retail analyst at GlobalData, said: “As the first of the Big Four supermarkets to release Christmas results, Morrisons announced marginally better than expected like-for-like sales over the period, beating analyst expectations of near-flat growth. Morrisons’ newly-found wholesale business continued to prop up overall sales, contributing 3.0% to group l-f-ls and helping to offset lower growth from fuel sales following price cuts towards the end of 2018.
“The update points towards price cutting as the main source of increasing customers, as Morrisons worked hard to keep the basket price of 'key Christmas items' the same as 2017. The Bradford-based grocer has continued in this vein into the New Year, earlier this week announcing that it intends to defend its food & grocery market share (8.3% in 2018) through cutting an average of 20% across more than 900 'store-cupboard favourite' products.”
He noted that Tesco has also announced price cuts and that Sainsbury’s is expected to do so if its merger with Asda goes through. Brereton anticipates another price war despite the challenges imposed by Brexit.