FTSE 100 supermarket giant Morrisons (LON:MRW) attracted record numbers of customers into its stores over the Easter holiday period and said it had made an encouraging start to the new financial year with sales growth continuing ahead of the market. However, the company insisted that it was wary of the challenging economic conditions for consumers and said that while its market proposition and promotions had been effective, it was still cautious on the outlook. The Morrisons share price nudged down slightly to 299.1p.

Reporting on the first 13 weeks of the year to May 1, Morrisons said that the price of oil, together with increases in other commodity prices, had compounded the existing pressures on consumers’ disposable incomes. Nevertheless, it said it had won over customers with its “fresh and quality offer, backed by value pricing and an outstanding and innovative promotional programme”. In particular, the “Biggest Ever Price Crunch” promotion at the start of the year and the “Fuel Britannia” and “Let’s Celebrate” campaigns for Easter and the Royal Wedding, attracted record numbers of customers into the company’s 403 stores.

Total sales, excluding VAT and excluding fuel were up by 4.2% (7.3% including fuel). Like for like sales grew by 2.5% (5.8% including fuel). Morrisons said it remained focussed on managing costs tightly and generating profitable growth through the delivery of operating and strategic initiatives that it outlined in March. These included plans to open more stores and look closer at the opportunities for opening convenience stores and developing on-line shopping channels. Also in March Morrisons announced a programme to retire £1 billion of equity over the next two years. To date it has acquired 24.7m shares at a total investment of £68.7m. The company said its overall expectations for the full year remained unchanged.

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