Supermarket group Morrisons posted its first decline in sales in nearly a decade today after it refused to square up to rivals with promotions "at any cost".
The UK's fourth biggest grocer, which has 455 stores in the UK, saw same-store sales excluding fuel and VAT decline 1% in the 13 weeks to April 29, compared to 1.8% growth in the whole of last year. City analysts had expected a marginal rise in sales.
Morrisons has not recorded a drop in like-for-like sales since its difficult acquisition of Safeway in 2004, which led to a series of profit warnings.
The group, which saw its market share dip to 11.9% in the 12 weeks to April 15, from 12.1% in the previous year, said the high cost of oil and other commodities continued to hit households.
But chief executive Dalton Philips said the grocer was not prepared to "pursue small market share gains at any costs" as rivals roll out discounts and special offers.
However, Morrisons, which recorded a better-than-expected 8% rise in underlying pre-tax profits to £935 million last year, said its outlook for the year was unchanged.