LONDON May 9 Britain's No. 4 grocer, Wm
Morrison Supermarkets, said talks with online grocer
Ocado on a possible tie-up were continuing, as it
posted another fall in quarterly sales.
Morrisons, which trails market leader Tesco,
Wal-Mart's Asda and J Sainsbury in UK market
share, said on Thursday sales at stores open over a year fell
1.8 percent, excluding fuel, in the 13 weeks to May 5, its
fiscal first quarter.
That compared with analysts' average forecast of down 2
percent, according to a Morrisons poll, but was an improvement
on a fourth quarter decline of 4.1 percent.
"This performance reflects a steady improvement from the
previous quarter and is in line with our expectations," the firm
said, adding that throughout the period the industry had
remained very competitive with promotional coupons and vouchers
a significant factor.
Morrisons said its expectations for the full year were
The firm is being hurt by its limited exposure to
convenience stores and lack of an online food offer.
These are the two fastest growing areas for Britain's
supermarkets as shopping habits change, with consumers
increasingly using the internet to shop and high fuel prices
discouraging trips to town centres and out-of-town malls.
In March Morrisons said it would launch an online food
business by January 2014, possibly with the help of Ocado.
Morrisons has also accelerated investment in convenience
stores, targeting 100 by the end of the year.
The firm, which unlike rivals produces a lot of the products
it sells, said it was doing a better job of telling customers
how its offer was better by, for example, highlighting its more
than 5,000 trained butchers, bakers and fishmongers, and doing
more to make its promotions stand out.
Shares in the firm closed Wednesday at 292.7 pence, valuing
the business at 6.8 billion pounds ($10.58 billion).
Grocers, despite their focus on essential goods, have not
been immune to the economic downturn.
Last month Tesco posted a 51.5 percent slump in year profit.
However, on Wednesday Sainsbury's reported a 6.2 percent rise in
Asda is due to update on its first quarter on May 16.