Morrisons sales rise faster than those at would-be bidder Sainsbury's for first time in five years amid signs of recovery

Sales growth at Morrisons has exceeded would-be-bidder Sainsbury's for the first time in five years as the struggling supermarket sees signs its turnaround is starting to pay off.

The last time Morrisons did better than Sainsbury's on quarterly sales growth was months before its £7billion takeover by a private equity firm in October 2021.

Britain’s second largest grocer Sainsbury’s called off merger talks with its smaller rival Morrisons earlier this year, it was revealed this month.

Sales at Morrisons increased 1.1 per cent in the three months to October 3, surpassing the 0.7 per cent jump at Sainsbury’s, according to closely watched figures from market researchers NielsenIQ.

But it now holds 8.3 per cent of the market, down slightly from the 8.4 per cent the same time last year.

Chief executive Rami Baitiéh, who took over as chief executive in November 2023, said last month that there was 'clear evidence that our strategy is delivering and that we remain on track'.

Baitiéh has overseen price cuts to reverse Morrisons' fortunes after losing market share to German discounters Aldi and Lidl.

But he admitted that trading conditions ‘remained highly competitive’ amid a price war between major supermarkets that has seen similar price cutting schemes.

The business has been struggling since it was taken over by private equity firm Clayton Dubilier & Rice (CD&R) in 2021 and last year its debt pile hit £7.5billion.

Morrisons had hailed its strongest sales growth for a year as the World Cup helped to bring shoppers through its doors. It said that hot weather and the football tournament lifted group like-for-like sales by 3.2 per cent over the 13 weeks to July 26.

In August, Morrisons launched a new ‘unbeatable prices’ pledge across more than 500 everyday products. It promises that the products covered will cost the same or less than at Aldi, Asda, Lidl, Sainsbury’s and Tesco, which ‘has already had a positive impact.’

Earlier this month, it was reported that Sainsbury’s held talks with Morrisons about a potential merger between November 2025 and February this year, according to the Financial Times.

But Sainsbury’s ended the talks and there are no active discussions, the report said.

A merger would be one of the biggest supermarket deals in over five years, creating a grocery giant with just over 22 per cent of market share.

Leader Tesco has a 26.3 per cent share, according to the same research.

Any takeover of Morrisons would be looked at by the competition watchdog and probably involve Sainsbury’s having to sell some shops.