Morrisons records its worst Christmas since 2014 in terms of sales

Morrisons records its worst Christmas since 2014 in terms of sales
  • Morrisons records the worst sales in 2019's Christmas period since 2014.
  • The decline in sales mirrors in all of the big four supermarkets of the UK.
  • German discounters Aldi and Lidl continue to snatch business from the big four.
  • Experts cite Brexit and global economic uncertainty to have weighed on the supermarkets' sales.
  • Morrisons' CEO says 2020 is likely to be a tough year for the supermarket as well.

As per the recent announcement, Morrisons had its worst Christmas in 2019 in the past six years with sales keeping under pressure owing to the rising global economic uncertainty and the intense competition last year.

According to Nielsen and Kantar, the leading names in the league of market researchers in the United Kingdom, the country saw all four of its prominent supermarkets namely Tesco, Walmart, Sainsbury’s, and Asda & Morrisons, post sharp declines in sales in the last quarter of 2019. The market researchers also added that the German discounters Aldi and Lidl continued to snatch business from the big four towards the end of the last year.

Britain’s Big Four Supermarkets Only Saw A 0.5% Sales Growth (YoY) In December

Experts had previously anticipated Morrisons to be the weakest performer of the industry in 2019’s last quarter. The company’s announcement on Tuesday aligned itself with the forecast.

As per the data for December, sales growth in Britain’s big four was recorded only 0.5% higher as compared to that of 2018, which marked the worst performance during the Christmas holidays since 2014. The researchers also commented that while the number of visits to the supermarkets wasn’t majorly hit, customers were seen more reluctant in actually buying stuff.  

In terms of numbers, the report highlighted a massive 16% decline in 2019 in Christmas puddings’ sales, an 8% drop in sparkling wines, and turkey sales were down by 1%.

The data revealed by Morrisons itself shows that in the past 22 weeks that ended on January 5th, the company recorded a 1.7% drop in underlying sales (excluding sales and fuel tax).

Experts Cite Brexit And Global Economic Uncertainty For Falling Sales

According to the experts, 2019 was the year of economic uncertainty with several Brexit events continuing to weigh on the financial markets as well as the UK’s general election on December 12th. Combined with the slower than expected increase in wages, the supermarkets’ sales were given to take a hit last year.

The CEO of Morrisons, David Potts, also lacked confidence in the performance for 2020. Potts was reported quoting that unless a trade deal is finalized between the United Kingdom and the European Union following the former’s departure from the EU on January 31st, the economic uncertainty is likely to keep its effect on the supermarkets’ sales.

Morrisons has dropped sharply (around 5%) in the stock market in the last 5 trading days from around 201 GBX to 190 GBX on Wednesday.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.
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