Food deflation to continue says Morrisons

The supermarket group Morrisons is expecting food deflation to continue in 2016, despite reporting good Christmas sales today.

“The economic recovery has been sustained in recent months,” said Morrisons in its interim statement covering the nine weeks to January 3, 2016. “A rise in consumer confidence, real wage growth, and higher disposable income are all potentially positive for food retailers.

“However, we have seen no change in shopping habits, with customers continuing to shop around for value and shopping more frequently. In addition, as we continue to lower prices, deflation has been a consistent recent feature of our like-for-like sales.

“Although some commentators predict the return of food price inflation, driven perhaps by higher global commodity prices, we expect deflation to continue as we keep investing in our proposition.”

The group’s comment came on the back of a positive performance over the festive period with its like-for-like sales, excluding fuel, up 0.2% for the nine-week period.

“We are pleased with our improved trading performance over the Christmas period,” said Morrisons’ chief executive, David Potts (pictured above). “While there is of course much more to do, we are making important progress in improving all aspects of the shopping trip, and our customers tell us they are pleased with the changes. In addition, we have made further progress in debt reduction, and our financial position is strong and getting stronger.”

Morrisons is a 100% supporter of British pork, according to the latest Porkwatch figures. In relation to other pigmeat items the group’s British-based sourcing is 54% for bacon, 71% for ham and 80% for sausages.


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