Supermarket group Morrisons has reported a slowdown in sales during its first quarter, but said it was still winning customers.
The grocer posted like-for-likes up 0.8% in the 13 weeks to May 2, when total turnover advanced 5.9%.
Morrisons maintained it was “satisfied” with the performance, which partly reflected the “virtual elimination of food inflation and lower market growth” and had been anticipated.
The retailer said: “In a challenging environment for the consumer we have continued to invest for the benefit of our customers.
“Our keen pricing, supported by eye-catching and innovative promotional offers, has again proved successful as consumers have continued to search for value.
“We welcomed record numbers of customers into our stores, confirming the continued appeal of Morrisons as the food specialist for everyone.”
Shore Capital analyst Clive Black described the update as “frankly poor”. He acknowledged that Morrisons was vulnerable to lower food price inflation but noted there has not been deflation, adding “by implication volumes have materially slowed.”
He suspected that Tesco’s improving performance is affecting the entire grocery sector.
Collins Stewart analyst Greg lawless said Morrisons’ like-for-like performance was “a slight miss” but observed: “If Morrisons has like-for-likes of only 0.8% and is winning market share, this suggests that the underlying market is barely flat, with perhaps Asda and possibly Sainsbury’s in negative territory.”
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