Morrisons Sales Growth Outpaces Sainsbury's for First Time in Five Years
The turnaround strategy at Morrisons shows signs of success as it achieves faster sales growth than its potential bidder, Sainsbury's.
Morrisons has reported its strongest sales growth in five years, surpassing that of potential bidder Sainsbury's, signaling a potential turnaround for the struggling supermarket. In the three months leading up to October 3, Morrisons' sales increased by 1.1 percent, edging out Sainsbury's 0.7 percent growth.
This marks the first time Morrisons has outperformed Sainsbury's in quarterly sales growth since the months preceding its £7 billion takeover by private equity firm Clayton Dubilier & Rice in October 2021. Despite the recent growth, Morrisons' market share stands at 8.3 percent, a slight decrease from 8.4 percent a year ago.
Chief executive Rami Baitiéh, who took the helm in November 2023, stated last month that there was "clear evidence that our strategy is delivering and that we remain on track." Baitiéh has implemented price cuts aimed at reversing market share losses to German discounters Aldi and Lidl.
However, he acknowledged that trading conditions remain "highly competitive" due to an ongoing price war among major supermarkets. Morrisons has faced significant challenges since its 2021 acquisition, with its debt pile reaching £7.5 billion last year. In the 13 weeks ending July 26, Morrisons experienced its strongest sales growth in a year, with a 3.2 percent increase in group like-for-like sales, boosted by hot weather and the World Cup.
To further attract customers, Morrisons launched an "unbeatable prices" pledge in August, covering over 500 everyday products. The supermarket guarantees that these items will be priced the same or less than at Aldi, Asda, Lidl, Sainsbury's, and Tesco, a move that has reportedly had a positive impact.
Earlier this month, reports revealed that Sainsbury's had engaged in merger talks with Morrisons between November 2025 and February of the current year. However, Sainsbury's ultimately called off these discussions, and no active negotiations are currently underway. A merger would have created a grocery giant with over 22 percent of the market share, second only to Tesco's 26.3 percent share.