MORRISONS has reported a slowdown in sales in the run-up to Christmas, underlining the fierce competition in the supermarket sector over the crucial period.
The Bradford-based company, which has 450 stores in the UK, saw like-for-like sales excluding VAT and fuel increase 0.7% in the six weeks to January 1, compared with 2.4% in the previous quarter. The City had expected sales growth of 1%.
The slowdown came despite Morrisons, the fourth biggest supermarket in the UK, claiming a record number of customers, with an extra 800,000 per week shopping there during the period.
The battle for sales gathered pace in early October when Tesco introduced its Big Price Drop, prompting Sainsbury’s to launch a price-matching scheme and Asda to slash petrol prices. The group said total sales excluding VAT and fuel in the period were up 2.9% and were ahead 5.6% including petrol sales.
Morrisons said a number of “innovative promotional offers“ helped boost sales in the period and helped to pull in extra customers.
The grocer also launched a new range of M Kitchen ready meals created by chefs such as Bryn Williams, Nigel Haworth and Aldo Zilli and adverts starring former England cricketer Andrew ’Freddie’ Flintoff.
Morrisons chief executive Dalton Philips said he was pleased with the performance in a “very tough market“.
Morrisons said it would remain cautious in 2012, despite an expected fall in price pressures. The update comes after it was reported that Morrisons was sizing up several Best Buy megastores in a bid to grow its Kiddicare brand.
The company is understood to be in advanced talks with Carphone Warehouse about the 11 “big box“ sites, which are in the process of closing after a failed joint venture with American electricals giant Best Buy.
The move has the potential to shake up the UK baby products market at a time when market leader Mothercare is struggling.