SUPERMARKET operator Morrisons posted its first fall in sales in nearly a decade – after it refused to square up to rivals with promotions “at any cost”.
The UK’s fourth biggest grocer, which includes stores at Waterloo and Meltham among 455 sites across the UK, saw same-store sales excluding fuel and VAT fall by 1% in the 13 weeks to April 29. That 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 Bradford-based group saw its market share dip to 11.9% in the 12 weeks to April 15, from 12.1% in the previous year.
The company said the high cost of oil and other commodities continued to hit households.
But chief executive, Dalton Philips, said Morrisons was not prepared to “pursue small market share gains at any costs” as rivals roll out discounts and special offers.
Morrisons, which recorded a better-than-expected 8% rise in underlying pre-tax profits to £935m last year, said its outlook for the year was unchanged.
Shares closed 3.5p lower at 276.5p following the update.
The company has seen sales slow as Tesco unveiled its Big Price Drop, Asda pledged to be 10% cheaper than rivals and Sainsbury’s launched its brand-match scheme.
The group previously pledged to roll out smaller convenience formats throughout 2012 after the successful trial of three stores last year, but only opened two stores in the period.
Meanwhile, there was still no movement on plans for Morrisons to sell online. The company is not expected to reveal its plans until the end of the current financial year. The group gave no further details on the takeover of 10 former BestBuy stores, which it plans to open under its Kiddicare brand.