Morrison Supermarket posted a 1.8 per cent drop in like-for-like sales for the first quarter as the UK grocer invested in opening more convenience stores.
The jump in sales, which excludes fuel, for the 13 weeks to May 5th beat analysts' expectations for a 2.0% decline and were up from the previous quarter's 4.1% drop. Including fuel, like-for-like sales increased 2.6%.
Total sales, excluding fuel, were up 0.6%, but down 0.3% including fuel.
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Morrisons said since its last results it has focused on a strategy to improve its stance against rival supermarkets including Tesco and Sainsbury.
Part of its plan includes expanding its convenience offering through its Morrison M local stores.
During the period, the company opened six stores, including two Morrisons M locals and acquired more than 80 stores to add to its convenience pipeline.
The grocer said it was on track to meet its target for 100 convenience stores open by the end of the year, with 20 up and running in the first half.
Morrison also used a marketing strategy to promote the grocer's competitive prices and fresh food offering through its More of What Matters campaign. It came after the supermarket was rocked by the discovery of horsemeat in some of its beef products as part of an industry-wide scandal.
"Customers now understand our unique approach to sourcing meat through our own livestock buyers and abattoirs," the business stressed.
The company said it also invested in beating competitors with its pricing through its Pick of the Street offers and Payday Bonus loyalty reward programme.
Its first online food operation is on track for a January 2014 launch and discussions with Ocado are ongoing.
Morrison ended the quarter with a net debt of £2.3bn which was in line with expectations. The financial position of the group remains strong, it added.
"We have made a solid start to the year, with our sales performance improving since the last quarter," said Chief Executive, Dalton Philips.
"Our promotions have been more innovative and we are explaining Morrisons points of difference more effectively. These efforts were further reinforced by the horsemeat scandal which helped drive increasing customer recognition of Morrisons unique supply chain and approach to meat sourcing.
"Strategically, our ambition of building a genuinely multi-format, multi-channel Morrisons is right on track."
While the firm remains cautious on the economic environment and consumer spending, its full year expectations remain unchanged.
RD
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