Is Morrisons' Strategy Paying Off?

Morrisons has been operating a new strategy as of late, part of which involves reducing prices in or…

Morrisons has been operating a new strategy as of late, part of which involves reducing prices in order to try boost sales and win back market share from discounters. It seems to be paying off if the figures for the last month are examined, but is it too early to say?

The Kantar Worldpanel figures for the four weeks to August 17 show that Morrisons' sales increased by 2.4 per cent, compared to a sales decline of 3.8 per cent the previous month. This is the first four-week increase since last autumn. A small increase based on a limited period of analysis, but a welcome one nonetheless. The fact that the retailer ran several promotions during the most recent four-week period - and that this helped to boost performance - must be taken into account. The real challenge for Morrisons will be to repeat this result next month.

Morrisons' performance was just behind Asda's, which grew its sales by 2.5 per cent for the four weeks.

Some of the other UK retailers fared less well, Sainsbury's sales declined by 2.2 per cent for the period, while Tesco's sales fell by 3.8 per cent.

However, market shares for all big four UK retailers continue to be under pressure from the discounters.