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Bloomberg
Wm Morrison Supermarkets Plc reported its slowest quarterly revenue growth in at least a year and said it’s loosening a pact with online retailer Ocado Group Plc so that it can add other digital partners.
Comparable retail sales rose 2.3% in the first quarter. The figure missed analysts’ 2.5% estimate. Chief Executive Officer Dave Potts faces the challenge of building on the grocer’s turnaround even as discounters Aldi and Lidl are gaining market share.
Morrison could face a tough second quarter as its performance was boosted last year during that period by unseasonably warm weather and the positive impact of the World Cup. While a slower sales rate in the first quarter was expected, it’s down from the year-earlier 1.8%, too.
The Bradford-based grocer faces increasing pressure to expand sales at a time when a revived Tesco has improved its competitiveness. It has also focused on driving online sales through a partnership with Ocado Group Plc, and the companies said they agreed to loosen that relationship, freeing Morrison to strike new online partnerships.
Morrison has fallen 13% over the past 12 months. There could be renewed pressure if investors fear sales growth could turn negative in future.