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Profits warning by Morrisons after slump in Christmas sales
Bradford-based supermarket Morrisons is warning that profits for 2013 are likely to be below expectations following a 5.6 per cent slump in Christmas sales.
If fuel is included, the total sales fall was 7.1 per cent.
Morrisons said hard pressed consumers had been economising and managing their budgets very tightly and were shopping across a range of formats and retailers.
The supermarket admitted the Christmas period had been ‘‘...very challenging’’. Chief executive Dalton Philips added: ‘‘In a very tough market our sales performance over Christmas was disappointing.’’
Morrisons shares slumped by seven per cent this morning after an update described as ‘‘quite awful’’ by one City analyst.
Dalton Philips, chief executive, said: “In a very tough market our sales performance over Christmas was disappointing. However, we are firmly focused on driving our core business and accelerating our penetration of the fast growing channels.
“Our convenience business is building towards an operation of scale and the first food deliveries of Morrisons.com will be made tomorrow, reaching half of UK households by the end of the year.”
Marks & Spencer, led by former Morrisons boss Marc Bolland, suffered a tenth successive quarterly like-for-like sales decline in its beleaguered homewares and clothing division which slumped by 2.1 per cent.
A 0.5 per cent improvement in the eight weeks to Christmas Eve was not enough to save M&S from the deteriorating overall performance for general merchandise.
Tesco also reported like-for like sales down 2.4 per cent in the six weeks to January 4, blaming the weaker grocery market for its latest decline in UK like-for-like sales, although it said it still took £1 billion in sales in the five days before Christmas, including its biggest ever trading day.