Morrisons 'cautious' despite sales rise

Promotional campaigns helped to lift sales, Morrisons says

Supermarket group Morrisons has posted stronger-than-expected sales but says it remains "cautious" given the financial pressures facing shoppers.

Like-for-like sales - which ignore new stores - excluding petrol and VAT rose 2.5% from a year ago in the 13 weeks to 1 May, ahead of forecasts.

Promotional campaigns around the Easter and royal wedding weekends had boosted trade, the Bradford-based firm said.

But looking ahead it noted that economic conditions remained tough.

"The board is encouraged by the group's progress in the first quarter but with consumers' disposable incomes falling and an uncertain economic environment, we remain cautious," Morrisons said.

"Our overall expectations for the full year remain unchanged."

On Wednesday, fashion retailer Next raised its annual profits forecast after saying that the recent hot weather had boosted sales at its stores.

However, Next added that it did not expect this sales lift to continue over the next few months.

Earlier this year, Tesco said its underlying UK sales had fallen 0.7% in the three months to 26 February, while Sainsbury's sales including VAT rose 1% in the 10 weeks to 19 March.