Supermarket group Morrisons and the company behind the Garfunkel's and Frankie & Benny's restaurant chains are among a small band of retailers, focused on value for money, that are faring well in a tougher economic climate, results showed on Thursday.
Morrisons reported third-quarter comparable sales up 2.4% after stripping out the impact of petrol sales. Including fuel sales, on which Morrisons has a reputation for aggressive discount pricing, like-for-like sales growth reached 5.8%.
The supermarket group, which has not diversified as aggressively as others into non-food goods, earlier this year claimed its customer base was growing as the economic climate worsened.
It has remained focused on keenly priced groceries rather than chasing sales of flatscreen TVs or pet insurance. Recent Morrisons deals include a litre of Gordon's gin reduced from £17 to £15, a six-pack of Mr Kipling mince pies down from £1.79 to 89p; and a tin of Quality Street sweets for £4.99.
"Morrisons' focus on providing top-quality, fresh food and keen pricing, backed by an exciting and innovative range of promotions, has again met our customers' expectations," the group said in a brief trading update. While it acknowledged trading conditions were "challenging", Morrisons insisted trading was on track and reiterated its expectation that the environment would remain tough "for some time to come".
Philip Dorgan, an analyst at Panmure Gordon, said: "Third-quarter sales show Morrisons' resilience and good price positioning. It should be able to generate faster [sales] growth than Sainsbury's for the foreseeable future."
Meanwhile, the Restaurant Group said it too was making good progress "despite a tough economic backdrop". It reported comparable sales were ahead by 2.75% for the 44 weeks to 6 November, implying a slight pick up in trading September and October, according to analysts.
"The Restaurant Group has a distinct market positioning with strong brands and great value-for-money offerings," the company said. "Looking forward to 2012, although we expect a continuation of current trading conditions, our team will be working to ensure that the group continues its good progress."
Many of the group's restaurants are located in cinema complexes, airports and other locations away from the high street where rents are high and shopper footfall has dropped steeply. Recent offers and voucher promotions include "Forget the fees: feel the deal. 20% off for students" at Chiquitos and 25% off the food bill at Frankie & Benny's on a Monday evening.
The Restaurant Group also announced it had agreed new expanded five-year borrowings of £140m, with no changes to covenants.