As predicted, Morrisons has produced an underwhelming third-quarter update, saying that sales were lower than anticipated, although it did say that its full-year financial performance will be 'broadly in line with our expectations'.
In the quarter to October 28th, total sales excluding fuel were down by 0.4% (up 0.2% including fuel) and like for like sales were down 2.1% (down 1.3% including fuel).
The supermarket group blamed a combination of fragile consumer confidence and high levels of promotional activity for the lower sales. Importantly, it expects the market to "remain challenging for the remainder of the year".
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It said that it will continue with its £1bn share buy-back programme until March 2013, so far it has acquired 299m shares at a cost of £852m.
Other highlights during the period were the introduction of its Fresh Format into a further 35 stores, which means it is on track to meet its target of extending this to 100 stores by the end of this fiscal year.
It said the relaunch of its own brand lines, which will extend to 10,000 products is progressing well and it has also made significant progress in the delivery of Evolve, its IT infrastructure project, with the introduction of the crucial supply chain management system.
It has also launched Morrisons Cellar, its online wine operation but still lags behind its competitors in the online space.
Consensus estimates for the year ending January 31st 2013 were for pre-tax profits of £912.17m on turnover of £18.12bn.
CM
