Morrisons Sales Slump 6.3% In Third Quarter

Morrisons has reported another big fall in sales as the supermarket sector scraps for market share amid the challenge from discounters.

The grocer posted a 6.3% drop in like-for-like sales in its third quarter to 2 November - a figure that hit 8% when the effects of fuel sales were included.

Morrisons said competition in the sector remained "intense" and it would take time for its pricing initiatives to help sales recover.

As part of a wider plan announced in March to invest £1bn in price cuts over three years, the company recently launched a new loyalty card scheme which promises to match prices at the hard discounters Aldi and Lidl.

There have been signs that the strategy is starting to pay off after closely-watched data from Kantar Worldpanel pointed to an improved sales trend.

Chief executive Dalton Philips said today: "Morrisons is meeting the challenges created by a period of intense industry competition and structural change with quick and decisive action."

He insisted the initiatives designed to help the chain recapture market share were showing some encouraging signs.

The like-for-like sales drop for the third quarter did represent an improvement on the 7.4% drop Morrisons endured in the previous six-month period.

The group, which trails market leader Tesco, Asda and Sainsbury's in annual sales, said it remained confident in its full year 2014-15 profit outlook.

It now expects underlying profit before tax to be in the narrower range of £335m-£365m versus previous guidance of £325m-£375m.

Such a performance would represent a halving of profit on the previous financial year.

The Morrisons share price rose more than 7% in early trading on the FTSE 100, with investors apparently encouraged by improving sales trends.

It had lost a third of its market value this year in advance of the trading update amid a wider sell-off of supermarket shares.