Morrisons’ shares shot up six per cent on the news that its sales decline is slowing as customers warm to new initiatives such as price matching the discounters and £1bn in price cuts.
The Bradford-based grocer reported a 6.3 per cent drop in like-for-like sales in the 13 weeks to November 2.
The figure was better than the 7.6 per cent fall in the previous quarter and chief executive Dalton Philips said he was encouraged by initiatives to recapture market share.
As part of a wider plan to invest £1bn in price cuts over three years, the company recently launched a new loyalty card called “Match & More”, which promises to match prices at Aldi and Lidl.
Mr Philips declined to say that the worst was over, but said: “We’re firmly on track. It will take time for sales to improve.”
The new “Match & More” card price matches brands and own label products against Tesco, Asda, and Sainsbury’s and is the first to price match Aldi and Lidl. Customers get points at the till if products are cheaper elsewhere and once these have mounted up they are given a £5 voucher off their next shop.
“The highlight of the quarter was ‘Match & More’. We’re very happy with the launch programme and the customer response,” said Mr Philips.
He declined to comment on reports the group has signed up over a million customers.
“We’ve got 12 million transactions a week coming through. It’s going extremely well and we’re very encouraged.”
The group has decided to delay its Christmas campaign until November, reversing last year’s decision to start it in October.
“I thought last year we were too early. We wanted to have a Christmas bonus that’s very simple. I’m feeling pretty bullish about this Christmas. We want to neutralise on price against the discounters,” said Mr Philips.
“We’ve strategically positioned ourselves to be in the place to win.”
The shares rose 10p to 172.5p on the confident outlook.
Analysts noted the improving trends in basket size. Last Christmas items per basket fell 6.9 per cent, but the fall had reduced to 2.4 per cent in the 13 weeks to November 2.