UK retailer Morrisons has posted a 2.9% decline in like-for-like sales in the 13 weeks to May 3, its first quarter, according to results published this morning (7 May).
The decline follows a fall of 2.6% in the fourth quarter of last year, and indicates the nature of the uphill battle facing new chief executive David Potts.
The statement also noted that online sales were up 1%, meaning that store sales were actually down 3.9% in the quarter.
According to analyst Bruno Monteyne of Bernstein Research, "Morrisons have only just started the process of rediscovering how they will compete as a value-retailer. While we count the new CEO David Potts as a great addition to the team, we think the task of repositioning Morrisons is much harder than for Tesco as it has less competitive advantages and it will take much longer than what currently is embedded in consensus margin expectations."
Monteyne added that Potts has reiterated the priority outlined by chairman Andy Higginson, to "making the core supermarkets strong again".
Elsewhere, Conlumino consultant, Sophie McCarthy said that David Potts' "certainly seems to be making the right noises since joining the company. Putting the customer back at the heart of the business is a familiar recent mantra among the Big Four; a reflection of the increasing importance of attaining a stronger understanding of what the shopper wants.
"As it stands the first part of the challenge is getting people through the door at Morrisons and it is only by creating a distinctive and consistent proposition that it will stand a chance of winning back shoppers that have become disengaged over the last few years."
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones
