Morrisons’ online grocery store is set to pass £1bn in annual sales by next spring after doubling the number of delivery slots during the coronavirus lockdown.
The Bradford-based supermarket chain said sales on its Morrisons.com site had doubled, to £1bn on an annualised basis.
It is introducing a click and collect service at 280 stores by mid-June, more than doubling its business with Amazon’s Prime fast delivery service and selling tens of thousands of pre-prepared food boxes a week, delivered by courier DPD.
Morrisons has also set up a telesales service so that elderly and vulnerable shoppers who do not have access to the internet can order home deliveries from a local store. The company said it estimated it had trebled its total number of delivery slots across all initiatives with sales via Amazon now making up almost 1% of group sales a week.
David Potts, the chief executive, said Morrisons’ phone service in particular was offering a lifeline to vulnerable shoppers isolating at home. “We have heard so many stories, particularly from the elderly and vulnerable. Some said they didn’t know where their next meal was coming from,” he said.
His comments came after consumer and disability rights groups called on the government to better coordinate food deliveries for the vulnerable during lockdown, saying many had struggled to get access.
Potts said Morrisons had worked well with government and Public Health England but admitted that adapting to the surge in demand for home deliveries had been “challenging for everyone”.
Morrisons home shopping expansion comes after sales at established stores rose nearly 6% in the three months to 10 May, including a 10% jump in the last two weeks of the period.
But Morrisons said it continued to delay a decision on a planned £100m special dividend for shareholders as it had “minimal certainty or visibility on profits”. Costs – including delivery services, protective kit and staff bonuses – are expected to hit about £230m, in line with its expected savings on business rates under the government’s retailer support scheme.
The company said the outlook for sales was also uncertain in a volatile environment which could rapidly change depending on the pandemic.
A near-40% dive in fuel sales and the closure of in-store cafes will also hit sales and profits.
Potts said Morrisons had taken on 25,000 extra staff to help with demand in stores and online as well as to cover higher than usual absences, which peaked at 20,000. He said more than 200 members of staff had tested positive for coronavirus.
Potts said all staff who wanted them had been provided with free face masks or visors and he was also keen to sell such protection to shoppers.
The prospect of protective equipment being sold in grocery stores marks a change in the tenor of British life as the government changed its guidance to suggest people should wear a face covering in enclosed places where it is hard to keep two metres away from others, such as on public transport or in certain shops.
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