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Morrisons' like-for-like sales down 7.1%

Morrisons boss vows to fight on after another sales slide

Morrisons has reported a significant plunge in sales as the supermarket’s failed attempt to fightback against discounters and adds pressure on chief executive Dalton Philips.

Morrisons blamed the continuing plunge in like-for-like sales in the first quarter on a competitive market in which Aldi and Lidl enjoy rapid growth, driven by a wave of bargain-hungry customers.

The grocer last week slashed the price of 1200 lines by 17 per cent to counter the rise of the German discounters, which instilled fresh energy into its two-year battle to report like-for-like sales growth.

But Philips insisted that tour of 100 financial institutions as part of the grocer’s investor roadshow, which concluded last week, had “shown we have broad support for our strategy”.

“I’m very confident we are doing the right things,” said Philips. “My job is to make big, bold decisions. The proof will be when there are more items in more baskets — how could it not be the right strategy to tackle this on price?”

Sainsbury’s outgoing chief executive Justin King yesterday accused Morrisons of “playing catch-up” in lowering prices.

Philips retorted: “We are very competitive on our pricing, Sainsbury’s customers do not have the advantage of these cuts as they do not cover us in their Brand Match promotion.

“I’m happy with our position among the Big Four on price,  but versus the discounters we can  be cheaper.”

Pressure on Philips has intensified as criticism from analysts and former directors has added to a catalogue of problems including a huge payroll data leak and an angry backlash against the projection of an ad on the Angel of the North.

Philips’ strategy includes slashing prices and swiftly building up its food online and convenience shops arms.

Its long-awaited online grocery service will be launched in London next Friday in partnership with Ocado, with a trial in Ruislip.