UK retailer Morrisons insisted this morning (9 May) it is off to a “solid start” to its financial year despite a decline in underlying sales during the first quarter.
In the three months to 5 May, Morrisons revealed like-for-like sales fell 1.8%, or 2.6% including fuel. Total sales edged up 0.6%, but fell 0.3% including fuel.
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The company said the performance reflects a “steady improvement” from the previous trading period. In fiscal 2012, the group saw like-for-like sales drop 2.1%, excluding fuel.
According to Morrisons, the group has been losing share in the UK grocery market because it has failed to effectively communicate its offer and its loyalty programmes have failed to hit the mark. In order to address these issues, the supermarket operator has introduced a new advertising campaign – called “more of what matters” – and a new loyalty scheme – called “payday bonus”. The group said that these initiatives, along with a sharper focus on execution and a move to open more new stores, have slowed its sales decline.
Morrisons said the performance was in line with expectations and insisted that its full-year outlook remained upchanged.
Despite the upbeat tone of the trading update, investors reacted unfavourably to the continuing sales slide and shares in the group were down 2.29% at 10am (BST).
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By GlobalDataClick here for a flavour of what analysts thought of Morrisons’ trading update.
And click here for coverage of Morrisons’ press conference call, in which CEO Dalton Philips highlighted progress in fresh food.
