Morrisons sees sales fall in Q3, but claims to be "strong and improving"

Bradford-headquartered supermarket chain Morrisons has reported yet another dip in sales in the third quarter of its financial year.

The food retailer’s sales took a hit as it continues to invest in price cuts amid a deflationary UK grocery market.

Morrisons revealed that total sales excluding fuel were down 2% in the 13 weeks to November 1, or down 4.6% including fuel.

Like-for-like sales declined 2.6% excluding fuel, and 5.1% including fuel.

However, Morrisons chief executive David Potts said the supermarket chain is “making good progress” during the quarter and that it is continuing to invest in lower prices.

Morrisons also claimed that its financial position is “strong and improving”, with net debt standing at £2.1bn at the end of the third quarter. The chain now expects net debt for the full year to be lower than the previous guidance of £1.9bn to £2.1bn.

Morrisons reaffirmed that underlying pretax profit will be higher in the second half of the year than in the first.

In the first half of 2015, the supermarket chain’s total turnover was £8.1bn, which is down 5.1% compared to the same period last year. Store turnover also saw a decrease of 1.1% to of £6.4bn, which comprised a like-for-like decrease of 2.7% (including a contribution of 1.0% from online) and 1.6% from new stores.

During this time, Morrisons only opened one new supermarket (26,000 sq ft) and five M locals (14,000 sq ft), and in September, announced the closure of 11 storesas a cost-cutting strategy that will ultimately see 900 jobs losses.

David Potts, chief executive of Morrisons, said: “The business is moving at pace on the long journey towards improving the shopping trip for customers. Our priorities for the rest of the year are unchanged - to stabilise trading, reduce costs and further improve the capability of the leadership team. We are making good progress in many areas and customers are noticing improvements.”

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