The festive season ended up being a disappointment for Morrisons supermarkets.
Like-for-like sales at the UK’s fourth-biggest grocer fell 2.5% in the six last weeks of 2012. Their decline was steeper than in the third quarter. However, analysts were expecting an even worse performance.
As a result, Morrisons’ shares climbed 1% in early trading. They closed down 0.3% swept away by the downward trend on European markets.
In November Morrisons had a 11.5% market share in the UK, down from 12% the previous year. More and more Britons are doing their shopping online, but unlike other supermarkets, Morrisons has not yet gone into internet deliveries.
What’s more, with the economic crisis, increasing numbers of consumers are turning to German discount retailers Aldi and Lidl.
In a year, Morrisons has lost nearly 20% of its market value. Analysts say that in order to win back its clients, the grocer will have to cut prices, which will have a negative impact on its profitability.
The group has so far said it plans to open 70 convenience stores this year, a promising niche where it currently has little presence.