Morrisons Sales Fall 3% In Third Quarter

Morrisons says subdued consumer confidence and its low exposure to online and convenience shopping is to blame for falling sales.

Like for like sales including fuel in the third quarter - a measure charting the performance of continuing operations - plunged 3% or by 2.4% when fuel sales were excluded.

That was worse than analysts had predicted though the supermarket chain said it was in line with its own expectations.

Morrisons said its fledgling M local convenience stores had helped total sales grow 1% over the three month period to November 3 when fuel and VAT were excluded.

The chain has battled stronger competition from discount chains and previously admitted its late entry into the convenience market would hurt sales growth while it is yet to get its online food offering on the road.

It confirmed such deliveries would begin, as planned, in January but cover only Warwickshire initially, then Yorkshire followed by 50% of UK households by the end of 2014, including London.

The £200m investment in partnership with Ocado is coupled with continued expansion of its convenience network.

Morrisons expects to have 200 M local stores by the end of 2014 but its late entry into online grocery and convenience store channels, which are growing at about 16% and 20% a year respectively, has hurt its market share and profits.

The group trails market leader Tesco, Wal-Mart's Asda and Sainsbury's by annual revenue while - like its major rivals - it has also endured a threat to sales from discounters such as Aldi and Lidl.

The latest market share figures demonstrated the scale of the challenge to the so-called 'big four' - with Aldi enjoying a record share.

Morrisons said today its financial outlook for the full year was unchanged, though it noted consumer confidence remained subdued and it continued to see heavy promotional activity across the industry.

Its efforts to claw market share from rivals include an expanding Fresh Format concept and a Big Christmas Bonus scheme to reward customer loyalty.

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