Morrisons feels sales squeeze

The UK’s fourth biggest grocery chain reported a 2.1 per cent drop in third quarter like-for-like sales, excluding VAT and fuel, and warned the market is set to remain challenging.

Bradford-based Morrisons has been left trailing as competitors wage war through promotional deals, with its third quarter performance marking a deterioration on the 0.9 per cent sales fall seen in the first half of the financial year.

Morrisons said: “With consumer confidence still fragile and high levels of promotional activity a persistent feature of the market, the trading environment has remained challenging through the period and sales were lower than anticipated.”

It added full-year figures were expected to be “broadly” in line with its expectations.

The group also announced the departure of commercial director Richard Hodgson, who was one of the first key hires made by chief executive Dalton Philips after he took over at the group in 2010.

Martyn Jones, corporate services director, has been appointed interim commercial director pending the recruitment of a successor for Mr Hodgson.

Latest industry data from Kantar Worldpanel has shown Morrisons lagging the sales growth of its three big rivals as well as smaller players such as discounters Aldi and Lidl, although this is partly explained by Morrisons’ lower level of store openings as well as its lack of an online offer and a significant convenience business.

Morrisons said it recognised the ongoing importance of improving its performance, particularly in the communication of key points of difference to customers and in improving the effectiveness of its promotional activity.