Morrisons - comment

Morrisons is investing further in price cuts to try and shore its competitive position up. As a lever, price support has a finite life, however, we do not believe this is a forever crisis. Inflation is ameliorating and will be much less of an issue in 2023. Having raised £220m in a sale and leaseback transaction earlier in December, Morrison has the cash to support this additional £16m of price investment. Morrisons can raise further cash through property transactions for further price support. The cycle is not over with Tesco and Sainsbury launching more price cuts/price match schemes this week. Consumers are switching to Supermarket own-brands, and this is where Morrisons is focusing its price support Lidl is on course to pass Morrisons (as Aldi did in 2022). UK economic weakness will last longer, but 2024 should see a return to growth. The Kantar data for Christmas show Morrisons sales down 2.1%, albeit with performance levelling off.