Morrisons blames competitive market for first quarter sales fall

The struggling grocer said that in the 13 weeks to May 4 total sales excluding fuel fell 4.2%.

Despite the sales falls Morrisons’ boss Dalton Philips said the supermarket chain was “on track” with its plans it set out in March to save £1bn over the next three years, as it aims to “reinforce its core customer proposition”.

Morrisons said in the period it made “significant improvements” to its store layouts and last week it also launched a campaign to cut prices permanently across more than 1,200 products to “re-establish our credentials as a value-led grocer with a focus on fresh food”.

Philips added: “The reaction of our customers to the 1,200 “I’m Cheaper” price cuts we announced last week has been very positive.  Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers.” 

Morrisons added that investment in its IT infrastructure and systems is also on schedule, which will help make the business more efficient.

Its website is performing ahead of it expectations as it plans to make its first London deliveries on May 12 and it plans to reach 50% of UK households by the end of the year. It already delivers to Warwickshire and Yorkshire.

In the quarter Morrisons opened two supermarkets and 11 M local convenience stores. Morrisons aims to operate 200 convenience stores by  the end of the year.

Morrisons said that its online business and convenience offer combined are expected to account for over £500m in annual sales.

Morrisons added: “Whilst the trading environment remains challenging, our financial outlook for the full year of underlying profit before tax in the range of £325m - £375m, remains unchanged.”