UK supermarket Morrisons' sales growth picks up after cyberattack disruption

By James Davey

LONDON (Reuters) -British supermarket group Morrisons said sales growth improved in its second quarter after trading was dented in the previous quarter by the impact of a cyberattack at its technology provider.

The UK's fifth largest grocer, which has been owned by U.S. private equity firm Clayton, Dubilier & Rice since 2021, said on Thursday its like-for-like sales rose 3.9% in its quarter to April 27, having been up 2.1% in the first quarter.

"Morrisons has bounced back strongly from the disruption of the Blue Yonder cyberattack in November 2024," Chief Executive Rami Baitiéh said.

Against the backdrop of a "challenging macro environment", he said the grocer benefited from a focus on price, promotions and rewarding customer loyalty.

"With inflation driving subdued consumer sentiment, value remains at the forefront of customers' minds," he said.

UK food prices rose by 4.4% in the 12 months to May, the biggest increase in over a year, official data showed on Wednesday.

In March, Asda, Britain's third largest grocer, said it planned a campaign of price cuts and would take a profit hit to reset its business, stoking fears of a price war.

However, industry leader Tesco and number four player Aldi have both said pricing has remained rational.

Baitiéh, Morrisons CEO since November 2023, is attempting to modernise the business, which differs from its main rivals in that it also has its own production operations, making half of the fresh food it sells.

Despite the improvement in trading, the latest industry data showed Morrisons continuing to underperform the sales growth of Tesco and Sainsbury's, the number two player, as well as discounters Aldi and Lidl.

Data published by market researcher Kantar last month for the 12 weeks to May 18, showed Morrisons' UK grocery market share down 20 basis points year-on-year at 8.4%.

Earlier this month, Tesco reported a better-than-expected 5.1% rise in UK underlying sales for its first quarter which ran to May 24.

(Reporting by James Davey; editing by William James and David Evans)