Sales at stores open more than a year fell 2.4 per cent in the 13 weeks to 3 November, at the bottom of analysts’ range and worse than the 1.6 per cent decline seen in the first half.
But Philips insisted that results were in line with expectations and that the “growth trajectory coming out of the quarter was strong”.
He blamed the decline on a subdued consumer market, the absence of an online delivery service and still having a limited convenience store network.
Morrisons is banking on its recent tie-up with Ocado to revive sales. Its online delivery service will launch in January in Warwickshire.
It will then be rolled out in Yorkshire and should be available to half of all households in the UK by the end of the year.
The Bradford-based group is also targeting 200 new M local convenience stores by the end of 2014 and upgrading more than 500 stores.
Christmas is the most competitive time of year for retailers but Morrisons is hoping to lure shoppers with new promotions including a bonus scheme to reward loyal shoppers and 11,000 relaunched products.
“We know it is going to be a very competitive market but we are feeling more comfortable with our direction of travel and we have a certain level of confidence going into this quarter,” Philips said.
It will launch its Christmas TV ad today featuring Ant & Dec and music from Disney’s Beauty and the Beast.
“With Christmas just round the corner, we are pleased to see customers responding well to our Big Christmas Bonus and industry leading deals,” Philips added.
Morrisons shares closed at 280.10p, down 0.3 per cent.