Morrisons Aldershot

Morrisons saw like-for-like sales drop 5.6% in the six weeks to 5 January

Morrisons has reported a 5.6% fall in like-for-like sales excluding fuel for the six weeks to 5 January.

Total sales at the retailer also fell 1.9% (3.3% including fuel), as Morrisons claimed a slowdown in market growth had led to a challenging festive trading period.

Morrisons continued to blame its lack of significant presence in the convenience market and in online groceries for its poor performance however it did admit that its sales performance was not as strong as it had planned.

The announcement took the city by surprise as Morrisons was not scheduled to report until 20 January. Shares fell by more than 5% in early trading. The retailer said that its full-year profit forecast would now be at the lower end of market expectation – currently between £783m-£853m.

“In a very tough market sales performance over Christmas was disappointing,” said CEO Dalton Philips. “However we are firmly focused on driving our core business and accelerating our penetration of the fast-growing channels. Our convenience business is building towards an operation of scale and the first deliveries of Morrisons.com will be made tomorrow, reaching half of UK households by the end of the year.”

Morrisons said it now has 85 M Local convenience stores and has a target of 200 by the end of the year.

‘Unwelcome surprise’

“After pledging like-for-like sales growth, the 5.6% decline in like-for-like sales for Morrisons is a very unwelcome surprise. While there is a degree of credence in Dalton Philips’ frequent defence that the business is under-represented in the online and convenience growth channels, the collapse in sales (against soft comparables last year) indicates that Morrisons’ proposition and marketing failed to resonate with shoppers,” said Kantar Retail’s insight director Bryan Roberts.

“While the impending launch of online and growth in convenience provide some modest silver lining, the clouds over the main estate indicate that the fundamentals of the Morrisons offer may need to be revisited.” 

Read this: Will Morrisons online deliver?