UK retailer Morrisons reported growth in full-year sales, as well as a strong performance during the Christmas period.
The grocer’s full-year sales grew by 2.8% on a like-for-like basis, while EDITDA remained flat at £835 million amid external headwinds.
In the six weeks to 4 January, Morrisons saw like-for-like sales up 3.4%, boosted by its Market Street range and its manufacturing business.
Eleanor Simpson-Gould, senior retail analyst at GlobalData, described the company’s overall performance as strong, but noted that sales were not consistent throughout the year.
“Morrisons saw strong demand in Q2 where LFL growth was 4.2%, but faced a tougher trading environment towards the end of its financial year (LFL sales slowed to 2.4%), resulting in sharper price and promotional investment,” she added.
Shore Capital summed up the company’s performance as solid, adding that it benefited from recent stable market share.
‘Whilst FY25 EBITDA was stable year-on-year, it reflected enormous cost pressure; as such, it is pleasing to see some debt reduction recorded,’ the investment firm said in a note.
In terms of food and grocery, Morrisons’ push to reassert its ‘Market Street’ brand is helping the grocer compete more effectively in the premium market, according to GlobalData.
The retailer reported 17.4% growth in its premium ‘The Best’ range over Christmas, supported by the launch of ‘The Best Signature Collection’ and a refreshed produce range.
“Morrisons secured growth in non-food, with general merchandise up 10.0% and Nutmeg clothing rising 4.7% over Christmas, demonstrating that it can generate incremental spending beyond core food missions,” Simpson-Gould said.
Looking Ahead
Shore Capital noted that FY 2026 will be a key period to assess how Morrisons performs as food inflation eases in the UK, the impact of diet-suppressant drugs on sales volumes and product mix becomes clearer, and whether a stabilising Asda changes competitive dynamics.
The investment firm foresees a competitive but rational UK grocery scene, where the range of fascia trading momentum is likely to narrow in 2026.
‘Quite how Asda and Morrisons ultimately evolve is a big question for the industry,’ it noted.
Simpson-Gould believes that Morrisons’ investments in customer engagement have paid off.
Active users of the Morrisons’ More Card increased by 11% over the year to eight million, which gives the grocer a larger base to target with more tailored, value-based, and mission-driven incentives.
Simpson-Gould added, “Morrisons must now use this scale to convert Christmas-driven spikes into sustained growth, using ‘More Card’ data to build repeat purchases in fresh food and attach Nutmeg and general merchandise offers more consistently to the weekly shop.”
Shore Capital believes that Morrisons will need to keep executing well and continue to trade its estate effectively to make further cash profit progress in FY26, albeit a potentially easier cost environment may be a tailwind.
‘The firm is rational and so not a source of industry gross margin instability, to us, the ongoing near-term priority being to further deleverage and no doubt, in time, for its owners, to contemplate what next,’ it added.
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