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U.K. Grocers Have Weakest December Sales Growth in Five Years

Morrison’s Tough Christmas Was Slightly Less Bad Than Expected

(Bloomberg) --

British grocers suffered their weakest holiday sales growth in five years amid intense discounting as consumers reined in spending during the critical Christmas period.

Data from the retail analysis divisions of Nielsen and Kantar show that U.K. supermarket sales increased only marginally. Nielsen recorded 0.5% growth for the four weeks ended Dec. 28, which it said was the lowest rate since 2014. Grocery sales rose just 0.2% in the 12 weeks to Dec. 29, the slowest pace since 2015, according to Kantar.

“There was no sign of the post-election rush many had hoped for in the final weeks before Christmas, with shoppers carefully watching their budgets,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “In fact, many of us cut back on traditional and indulgent festive classics.”

A glimmer of positive news came on Tuesday from Wm Morrison Supermarkets Plc, the first of the Big Four grocers to report holiday figures, though the results were only slightly less bad than expected. Sales at Morrison stores open at least a year dropped 1.7% in the 22 weeks through Sunday, excluding fuel. Analysts had estimated a 2.2% decline. The drop reflects a continued slowdown in growth at Morrison, which has been undertaking a wide-ranging strategic turnaround for the past few years.

Morrison’s share of the U.K. grocery market edged down to 10.3% in the final three months of 2019 from 10.6% a year earlier, according to Kantar.

Shares in Morrison rose as much as 3.7% after the company reported sales. They’ve lost about 10% in the past 12 months.

Chief Executive Officer David Potts said on a call that the grocer may have made a misstep in failing to participate in the Black Friday sales period in November, which provided a bounce in sales in the past.

To contact the reporter on this story: Deirdre Hipwell in London at dhipwell@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Anne Pollak, John Lauerman

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