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Morrisons reports sales fall in Christmas trading period

Morrisons has blamed a tough economic backdrop and sustained consumer uncertainty for the sales drop
Morrisons has blamed a tough economic backdrop and sustained consumer uncertainty for the sales drop

Morrisons, Britain's fourth largest supermarket group, reported another fall in underlying sales over Christmas.

The company blamed a tough economic backdrop and sustained consumer uncertainty for the sales drop.

Total group like-for-like sales, excluding fuel and VAT sales tax, fell 1.7% in the 22 weeks to January 5 - a period that spans Morrisons' third quarter from November 3 and the nine-week Christmas trading period. 

The outcome was better than feared however, with analysts forecasting a decline of 2.2%. 

"It was encouraging that during an unusually challenging period for sales, our execution was strong and our profitability robust, demonstrating the broad-based progress we have made during the turnaround," the supermarket's chief executive David Potts said. 

Despite the sales fall Morrisons said it expected to report profit for the full 2019-20 year within the current range of analysts' forecasts. 

It said it had managed costs well throughout the period, offsetting some of the impact on underlying sales. 

Morrisons has a UK grocery market share of 10%, trailing market leader Tesco, Sainsbury's and Walmart's Asda in annual sales. 

All of Britain's big four supermarket groups are continuing to lose market share to German-owned discounters Aldi and Lidl, which are continuing to open new stores aggressively. 

Aldi UK this week reported a 7.9% increase in total sales in the four weeks to December 24 and said its like-for-like sales were positive.