MORRISONS chief executive Dalton Philips insisted yesterday that its price-cutting plan will win over customers defecting to discount rivals despite the decline in like-for-like sales worsening in the first quarter of the year.
Total sales excluding fuel fell 4.2 per cent in the 13 weeks to 4 May while like-for-like sales slumped 7.1 per cent, compared with a 5.6 per cent decline over the Christmas quarter.
Despite the weak performance, shares jumped over four per cent, bolstered by the bullish expectations.
“We were disappointed. It wasn’t a strong Easter for us,” Philips said, adding that customers who usually return from discounters to do a full shop over Easter failed to do so this year.
The supermarket is spending £1bn over the next three years on lowering the prices of everyday products in a bid to narrow the gap with discounters. Last week saw prices on 1,200 products including branded items cut by an average of 17 per cent.
“It’s very early days but as we improve our competitiveness, our points of difference will shine through,” he said.
Morrisons lacks the same convenience and online presence as its rivals and has been playing catch-up. Its new online grocery service is due to start delivering in London next week.
Morrisons has already warned that profits will be halved this year due to its price cut investments and said its forecast of £325m-£375m of profits remained unchanged.