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London - Morrisons, Britain's fourth biggest grocer, on Thursday revealed a further deterioration in its sales performance, highlighting the tough turnaround job facing new boss David Potts.
Shares in the Bradford, northern England, based group which trails market leader Tesco, Wal-Mart's Asda and Sainsbury's in annual sales, fell 6.7%. This followed the company's update which said sales at stores open over a year, excluding fuel, fell 2.9% in the 13 weeks to May 3, the firm's fiscal first quarter.
That compares to analysts' forecasts of a decline of about 3% and a fall of 2.6% in the fourth quarter of Morrisons' 2014 to 2015 year.
The update is the first presided over by chief executive David Potts, who succeeded the sacked Dalton Philips on March 16.
Analysts noted comparative numbers were very weak as Morrisons' like-for-like sales had slumped 7.1% in the first quarter of 2014 to 2015.
Morrisons, which in common with its rivals is grappling with record food price deflation and an intensifying price war launched to stem the flow of shoppers to discounters Aldi and Lidl, said it anticipated that underlying profit before tax in the 2015 to 2016 year would be higher in the second half than the first.
Finance director Trevor Strain told reporters the company was comfortable with analysts' average full-year forecast of £356m but noted consensus had drifted down from £387m when Morrisons reported 2014 to 2015 results in March.
"It's an uphill challenge reinvigorating Morrisons' fortunes," Himanshu Pal, director of retail insights at researcher Kantar Retail, said.
"Not only because of the general declining footfalls at big supermarkets but the retailer is also significantly underrepresented in convenience and online channels."
Ex-Tesco executive Potts has hit the ground running, axing the majority of the management team he inherited a week after joining.
He has since announced plans to cut head office staff by 720, at a cost of £30m to £40m, while adding 5 000 shop floor staff to improve customer service.
Potts has also brought back staffed express checkouts and jettisoned the previous management's computerised queue management system.
"Our priorities are to improve the customers' shopping trip and make our core supermarkets strong again," he said.
"We are listening hard to customers and colleagues and, wherever possible, we are responding quickly."
Potts said he would provide a detailed update on his plans when Morrisons publishes first half results in September but said the focus would continue to be "to invest more for customers in order to build trading momentum."
Morrisons also said it had appointed Darren Blackhurst as group commercial director. Blackhurst joins from Kingfisher's B&Q and formerly worked for Matalan, Asda and Tesco.
Shares in Morrison were down 12.6 pence at 176.6 pence at 09:55.
