Morrisons sales rise as it continues to pay down debt

(Sharecast News) - Morrisons reported higher sales in its third quarter on Wednesday, as the supermarket operator pushed through price cuts and launched its biggest new product range in a decade, while continuing to pay down debt under private equity ownership. The Bradford-based grocer said group like-for-like sales rose 3% in the 13 weeks to 27 July, marking its eleventh consecutive quarter of growth, with total sales up 3.5% to £4bn.

Online sales grew at a double-digit rate, making Morrisons the fastest-growing online grocery retailer in the market during the period.

Chief executive Rami Baitiéh said the company had delivered growth "against a background of rising inflation and challenging macroeconomic conditions", adding that market share had remained stable this year.

"Consumers are feeling the squeeze and we are continuing to work hard to help our customers make the most of stretched household budgets, staying true to Morrisons values of providing good affordable fresh food for all," he said.

Baitiéh said the group had cut prices on 650 everyday items and launched more than 400 new products as part of a fresh food range reset this week, describing it as "our biggest Fresh range launch for a decade".

He added that the measures would help customers' money "go further as we head towards the peak Christmas trading period".

Morrisons said it delivered £63m of cost savings in the quarter, taking total debt reduction to £261m, and said it remained on track to achieve £1bn in savings by the end of the 2026 financial year.

Chief financial officer Jo Goff said the group had "completed a material refinancing which further reduced gross debt, and proactively extended maturities to 2031", adding that Morrisons has now repaid £2.7bn of debt since its 2021 acquisition by US private equity firm Clayton, Dubilier & Rice.

Goff said debt had fallen by around 43% from £6.2bn at the time of the takeover to about £3.5bn today, and that the group was making "good progress" on restructuring despite "significant external cost headwinds".

Reporting by Josh White for Sharecast.com.