Wm Morrison Supermarkets Plc reported its second consecutive quarter of sales growth, signaling that changes made by Chief Executive Officer Dave Potts have stabilized the business after a four-year slump.
Same-store sales rose 0.7 percent in the 13 weeks ended May 1, the U.K.’s fourth-largest grocery chain said in a statement Thursday. That compares with the median estimate of 16 analysts for a 0.2 percent increase. The figures exclude fuel.
Since starting the job just over a year ago, Potts has cut prices, put more staff on the shop floor and sold Morrison’s unprofitable convenience stores. While sales are no longer falling, Morrison is still battling against the food price deflation that has squeezed profit margins across the industry for the last two years. Potts said he expects prices to continue falling, echoing comments on Wednesday by J Sainsbury Plc CEO Mike Coupe.
“Customers are responding and satisfaction levels remain ahead of last year," Potts said in the statement. “We will continue to invest in improving the shopping trip for customers.”
Morrison shares have been among the best performers in Britain’s FTSE 100 Index this year, rallying 27 percent to 187.5 pence as of Wednesday’s close.
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