EMBATTLED supermarket chain Morrisons insisted it was "moving at pace"to turn around trading as it revealed another hefty slide in sales.

The UK's fourth biggest grocer said like-for-like sales dropped 2.6 per cent, excluding fuel, in its third quarter to November 1. Including fuel, same store sales were 5.1 per cent lower.

Bradford-based Morrisons said the slide came as it continued to cut back on promotional vouchers, which impacted sales by at least 2.4per cent over the three months.

The fall in sales is steeper than the 2.4per cent seen in the previous three months.

The group's performance was dragged lower by its move to cut back on vouchers in favour of lower prices in store.

It said this saw overall prices fall by 2.2 per cent compared with a year earlier, not including lower fuel prices at its forecourts.

Chief executive David Potts said: "The business is moving at pace on the long journey towards improving the shopping trip for customers.

"Our priorities for the rest of the year are unchanged - to stabilise trading, reduce costs and further improve the capability of the leadership team."

He added the group was "making good progress in many areas and customers are noticing improvements".

In September, the chain announced the closure of 11 supermarkets, putting 900 jobs at risk, as it reported a 47 per cent slump in half-year profits.

The day before, it said it had agreed the sale of 140 M local convenience stores for around £25 million to concentrate on its larger supermarkets.

Morrisons reiterated it is expecting underlying profits to increase on the first half, when they slumped to £126 million.

But it is facing a tough challenge to boost trading, as the latest figures revealed not only a fall in prices, but also hefty declines in the number of sales, with items per basket down 1.9 per cent and the number of transactions two per cent lower in the third quarter.

Sales from its online operation - which launched at the end of 2013 - contributed one per cent to the third quarter like-for-like sales.

Former Tesco man Mr Potts has pledged to restore the chain's fortunes by improving its products and service levels and sharpening its pricing.

Commentators were divided about the Morrisons figures with John Ibbotson of Retail Vision saying it was "delusional" to believe it was making progress, given the poor third quarter figures.

But analysts at Jefferies said a "stronger Morrisons is emerging", with recovery efforts paying off by improving the customer experience