Morrisons leaves behind sour taste after a slowdown in growth

Supermarket chain Morrisons fell foul of the City on Tuesday after admitting that its growth had slowed.

The grocer said same-store sales rose by 5.6% for the quarter to November 4, but this was mostly thanks to its wholesale business increasing by 4.3%. It supplies McColls, the convenience store chain, and Amazon.

Its core supermarket sales accounted for growth of 1.3% but this was slower than the 1.8% the City had forecast. Sales in the previous quarter rose 2.3% boosted by the warm summer and World Cup.

The shares, which have risen steadily this year, fell more than 5% to 241p today.

Chief executive David Potts has been slashing prices since he joined three years ago. He said the firm had enjoyed a strong Halloween and was “well set up” for Christmas.

AJ Bell’s Russ Mould was unfazed by the wobble and said: “None of this should detract from what Potts has achieved and it is worth pointing out this is the 12th consecutive quarter of like-for-like sales growth.”

Bruno Monteyne, an analyst at Bernstein, added: “We expect the wholesale market to continue to consolidate, which provides further growth opportunities for Morrisons.”

The City is expecting annual profits of £409 million.

Fleshing out the vegan offerings

Morrisons said that it was beefing up its vegan range, a week after rival Waitrose got in hot water after making controversial vegan jokes.

Morrisons will sell 300 vegan products, labelled with special logos to “make them easier to identify”, from next week.

The move comes a week after the editor of Waitrose Food magazine, William Sitwell, resigned. He had suggested a series on “killing vegans, one by one” in an email response to a freelance journalist who had pitched a piece.

Waitrose, which is also selling more vegan products, distanced itself from the incident and said it “didn’t represent our views about vegans and vegan food”.

Morrisons is also launching Little Kitchen next week, a new brand for children’s food.