New trading space at Morrisons boosted its first quarter sales by 1.6%.

Morrisons has reported strong like-for-like sales for the first quarter 2008, despite trading under a “noticeably tougher economic backdrop.”

For the 13 weeks to 4 May, total sales rose 12.6% compared with an increase of 5% in 2007. Excluding fuel, sales were up 8.6%, against a 4.6% increase the previous year.

The company said 1.6% of sales were derived from new trading space. It also attributed the launch of 3,000 new and refreshed products during the period and 8,000 over the year to the sales boost.

The company has completed the second contribution of £100 million into its pension schemes and has repurchased 2.7 million shares under its buy back programme for £7.3m.

It will now continue with its optimisation plan, which includes the rollout of new branding, vehicle branding and its Market Street format by the end of July 2008.
 
In a statement, the retailer said its Board is “encouraged by the performance of the business to date”, despite the challenging market; and looking forward, it added that its “financial outlook for the current year remains unchanged.”

By Natasha Piscitelli