WM Morrison sales slump as grocer waits for price cuts to bite

8th May 2014 06:53

- Trading environment 'challenging'- Sales down 4.2 per cent, LFL sales fall 7.1 per cent- Full-year outlook unchangedUK supermarket chain WM Morrison has held on to its full-year targets but blamed heightened competition across the industry for a slump in sales in its first quarter."As anticipated the market has continued to be competitive throughout the period," the company said in a statement on Thursday.Morrison, which as part of the Big Four grocers is losing market share to the so-called 'discounter' shops like Aldi and Lidl, reported a 4.2% drop in total sales excluding fuel in the 13 weeks to May 4th (down 5.6% including fuel).On a like-for-like basis, sales fell 7.1% (down 8.2% including fuel).In March, Morrison unveiled a major shake-up to cut prices by a combined £1bn over the coming three years in an effort to win back customers and re-establish itself as a 'value-led' grocer. The company is also investing in its IT infrastructure and systems to cut costs."The plans we set out at our results in March are on track. The reaction of our customers to the 1,200 'I'm Cheaper' price cuts we announced last week has been very positive," said Chief Executive Dalton Philips."Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers."The company, which launched its Morrisons.com earlier this year, said that the online shopping channel is performing ahead of expectations and "momentum is building rapidly".Morrison said the trading environment "remains challenging", but the financial outlook for the full year remains unchanged with the company still guiding to an underlying profit before tax in the range of £325-375m.BC