Wm Morrison reported it had missed sales targets in the run up to Christmas as the supermarket's promotions and marketing failed to pull in customers.
The retailer said the shaky performance meant full year performance would be "broadly in line with...expectations".
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It also said it been beaten by rivals' online and convenience stores - areas Morrisons has only recently entered.
On top of this, the economic environment meant consumers were increasingly shopping to a budget and vouchering had become a prominent feature of a highly promotional market, the group added.
In the six weeks to 30th December total sales (excluding fuel) were down by 0.9% down 0.5% when fuel was included.
Like-for-like sales dropped by 2.5% (or 2.2% including fuel).
"In a difficult market our sales performance was lower than anticipated, but we have a strong business and significant opportunities to advance our strategy, as we accelerate our multi-channel offer," said Chief Executive Dalton Philips.
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