Morrisons increased like-for-like sales by 3.2% during its third quarter as the supermarket reported stronger volumes, online growth and further progress in its long-running cost-reduction programme.
Total sales reached £4.1bn during the 13 weeks to 26 July, with the company recording its fifteenth consecutive quarter of like-for-like growth. Morrisons also said it increased market share year on year during the period.
The result represents an acceleration from the previous quarter. Management said trading benefited from hot weather and the World Cup, while supermarkets, online, convenience, pharmacy and the group’s Myton manufacturing operations all recorded growth.
Online sales increased at a double-digit rate, supported by Morrisons Now and other rapid-delivery services. The business has also continued to expand its convenience presence, opening 71 Morrisons Daily franchise stores so far this year.
Chief executive Rami Baitiéh said: “We traded strongly, growing ahead of the market and delivering a robust result, with an acceleration of like-for-like sales growth to 3.2%.”
The sales improvement is being accompanied by further cost reduction. Morrisons delivered £53m of savings in the quarter, taking the cumulative total since the programme began to £995m. The company says those reductions have helped absorb external cost pressure while supporting investment in staff and customer pricing.
That trade-off remains central to UK grocery competition. Supermarkets are operating in a market where shoppers remain highly sensitive to price while labour, logistics, energy and supplier costs continue to pressure margins. Internal efficiency gives retailers more room to invest in prices without sacrificing the entire cost increase through lower profitability.
The challenge is that savings become harder to repeat as programmes mature. Initial rounds of procurement, process and estate efficiencies can remove obvious cost, but later gains can require more fundamental changes to technology, staffing or supply-chain design.
Morrisons has also raised the target for its working-capital improvement programme to £750m, indicating that balance-sheet efficiency remains a significant part of the turnaround. The group said debt has been reduced by 46% since 2022 and that it has no near-term maturities.
The company’s vertically integrated operating model differentiates it from several large competitors. Morrisons manufactures a meaningful proportion of its fresh food itself, giving greater control over product and supply but also leaving it with production assets and fixed costs that have to be used efficiently.
Convenience and online growth are adding additional channels. Franchise stores allow Morrisons to expand its branded presence with less capital than developing a wholly owned supermarket estate, while rapid-delivery services give the company exposure to smaller and more frequent digital orders.
Those formats also increase operating complexity. Large supermarkets, convenience distribution and online fulfilment have different labour, inventory and delivery economics. Retailers have to grow the newer channels without allowing the additional cost of serving them to dilute margins.
Competition remains intense. Larger listed rivals continue to invest heavily in loyalty pricing, private-label ranges and digital fulfilment, while discounters maintain pressure at the value end of the market. Market-share gains can therefore require continuing price investment even where sales volumes improve.
Morrisons enters the final part of its financial year with stronger momentum and nearly £1bn of accumulated cost savings. The next stage of the turnaround will be judged increasingly on whether those operational gains translate into sustained sales and market-share improvement rather than on cost reduction alone.
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