Morrisons' Christmas sales 'disappointing'

Retail consultant Rahul Sharma: "Morrisons is probably the worst placed of the grocers"

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UK supermarket chain Morrisons has said its sales over Christmas were "disappointing", even after taking into account difficult market conditions.

It said that in the six weeks to 30 December like-for-like sales, which exclude new store openings, fell 2.5% compared with the same time last year.

Morrisons said the figures showed it needed to improve its promotions.

It also said that they showed the importance of online shopping, which Morrisons does not offer.

"Notwithstanding these difficult market conditions, which we expect to continue through 2013, our sales performance in the period was disappointing," the retailer said in a statement.

"This reflects both the need to improve our promotional innovation and the communication of our points of difference... and the accelerating importance of other channels, such as online and convenience, which Morrisons has only recently entered."

Morrisons is the UK's fourth largest supermarket group, and plans to have opened 70 convenience stores by the end of the year.

Ant and Dec

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Bill Grimsey

The High Street's days are numbered”

End Quote Bill Grimsey Former chief executive, Wickes and Iceland

Rahul Sharma, director of retail consultancy Neev Capital, said Morrisons was also suffering from a resurgent Tesco.

"The fact is Tesco is throwing a lot of promotional money and using a lot of offers to bring people back into the stores," he told the BBC.

"I think that's a big reason why Morrisons is getting hurt as well."

Tesco's Christmas figures will be out on Thursday while Sainsbury's will update the markets on Wednesday.

Morrisons' chief executive Dalton Philips said that his company was not getting over its points of difference - its skilled butchers, bakers and fishmongers.

"We do so much more than anyone else and we aren't getting that message across," Mr Philips told analysts on a conference call.

He said this would be a priority for newly appointed trading director Casper Maijer, who joins the company from Dutch supermarket group Ahold.

The Bradford-based chain is in the process of revamping its advertising, having announced at the end of last week that it had signed Ant and Dec to front its commercials.

The supermarket chain will also be sponsoring some of their Saturday night television programmes such as Britain's Got Talent and Ant & Dec's Saturday Night Takeaway.

Morrisons said that despite the disappointing six-week period it still expected its full-year results to be in line with its previous forecasts.

The fall in sales was still not as bad as analysts had been expecting and Morrisons' shares rose 1% in early trading in London.

Looking ahead, finance director Richard Pennycook said 2013 would again be "very tough" for consumers and therefore trading would remain difficult for retailers.

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