Following today’s release of Sainsburys’ figures for the 52 weeks to 30 October 2022; Joe Dawson, retail analyst at GlobalData, a leading data and analytics company, offers his view: “2022 has been a year to forget for Morrisons – after being overtaken by Aldi as the fourth biggest supermarket in UK in terms of market share, it has finished the year with a disappointing set of results. The grocer reported a 4.2% decrease in group like-for-like sales excluding fuel for its fiscal 2021/22, despite being up against fairly week comparatives in the previous year. Its adjusted EBITDA decreased 15% year on year to £828m, despite a 26% increase in Q4.
“The food & grocery market saw rapid growth in 2022 as food inflation soared to 16% in the later months of the year, leading to shoppers prioritising spend on essentials and trading down to own brand products and to discounters Aldi and Lidl. Despite announcing price cuts in its Savers range later in the year, Morrisons’ vertically integrated nature made it more difficult to rapidly adjust to the pressures of rising inflation and energy costs, while Tesco and Sainsbury’s continue to effectively protect themselves against challenges posed by discounters.
“The major grocers’ early adoption of Aldi Price Match schemes has allowed them to compete on affordability both reporting positive like-for-like sales growth in Q3 2022/23 and during the Christmas period, while Morrisons has been very late in its efforts to convince shoppers it is delivering on price and has suffered as a result. Tesco’s like-for-like sales increased 7.2% and Sainsbury’s saw growth of 7.1% in total retail sales for the six weeks to January 7, and while Morrisons reports a different period, its like-for-like sales growth of 2.5% for the three weeks to December 25 would indicate it is seriously lagging its larger rivals.
“The outlook for Morrisons in 2023 is more positive, as it should benefit from a greater focus on further price cuts and loyalty-based savings and rewards, as well as the expansion of its recently acquired convenience branch in the form of McColls. However, this will be an uphill battle, as competitors continue to improve their own value offerings and discounters make strides in gaining market share and consumer loyalty.”
