12th January 2016
As Morrisons reports its Q3 results Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors…
Investors received a late Christmas boost from Morrisons today, as the retailer reported like-for-like sales in the run up to Christmas had beaten market expectations with a 0.2% rise. There were also positive signs that shoppers are returning to the supermarket as the number of like-for-like transactions rose 1.3% year-on-year.
The company’s comparatively new CEO has again changed its strategy by selling off its convenience stores in order to concentrate on the main stores in an attempt to improve all aspects of the shopping trip. Whilst David Potts said he was ‘pleased’ with the results today, investors should be aware that there remains much more to do.
These results have led to investors asking whether the group’s new strategy is starting to work and help it fight off the threat of competition, particularly from Aldi and Lidl. Investors should appreciate that the full effects will take time and the new strategy remains a work in progress. As a result of this, we recommend Morrisons as a ‘hold’ and prefer Sainsbury’s for investors interested in the sector.