Discount battle leads to fall in sales at Morrisons
Morrisons has suffered its first fall in underlying sales for nearly seven years, which the grocer blamed on a blitz of discounting coupons from rivals and the impact of higher petrol prices on households.
Dalton Philips, the chief executive, said there had been a further deterioration in consumer spending, although London and the South-east remained the "fastest-growing" region for the UK's fourth biggest grocer.
The Bradford-based supermarket posted a 1 per cent fall in like-for-like sales, excluding fuel, over the 13 weeks to 29 April. This was its first decline in underlying revenues since the autumn of 2005, following its acquisition of Safeway in 2004.
Mr Philips said the grocery market was "extremely competitive" but that Morrisons would focus on "growing at a measured rate" and would not get drawn into "irrational" discounting, which could hurt its profit margins.
Mr Philips said "our largest competitor" – by which he meant Tesco – had issued promotional vouchers for eight of the last 13 weeks. While Tesco's underlying sales also fell 1.6 per cent in its most recent fourth quarter, the weak performance of Morrisons suggests the market leader's aggressive promotional activity and the launch of its £1bn investment in its UK stores is starting to hurt its smaller rival.
Mr Philips also believes there has been a further step down in consumer spending. He said: "It has got even tougher. Fuel is clearly the biggest one at the moment. The average family with two cars is paying £26 more a month on fuel than they were before [this time last year] – that eats into the monthly household budget."
Morrisons also detailed how the wet April has affected trading. Despite the end of the winter, the grocer said it was shifting as many cold and flu remedies as products for pollen allergies.
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...