Morrisons sees improving trade

MORRISONS reported another fall in quarterly underlying sales today, but the figures were better than expected and an improvement on the previous quarter.

The Bradford-based chain said like-for-like sales fell 1.8 per cent in the 13 weeks to May 5, an improvement on the fourth quarter decline of 4.1 per cent.

Analysts had pencilled in a fall of 2.0 per cent.

Britain’s No. 4 grocer said talks with online grocer Ocado on a possible tie-up are continuing.

Morrisons, which trails market leader Tesco, Wal-Mart’s Asda and Sainsbury’s in UK market share, said its expectations for the full year are unchanged.

“This performance reflects a steady improvement from the previous quarter and is in line with our expectations,” the firm said, adding that throughout the period the industry had remained very competitive with promotional coupons and vouchers a significant factor.

The firm is being hit by its limited exposure to convenience stores and lack of an online food offer.

These are the two fastest growing areas for supermarkets as shopping habits change, with consumers increasingly using the internet to shop and high fuel prices discouraging trips to town centres and out-of-town malls.

In March Morrisons said it would launch an online food business by January 2014, possibly with the help of Ocado.

Morrisons has also accelerated investment in convenience stores, targeting 100 by the end of the year.

The firm, which unlike rivals produces a lot of the products it sells, said it was doing a better job of telling customers how its offer was better by, for example, highlighting its more than 5,000 trained butchers, bakers and fishmongers, and doing more to make its promotions stand out.

Leeds-based rival Asda is due to update on its first quarter on May 16.