Morrisons loses out to rivals during Christmas sales period

Morrisons is expected to announce a disastrous run for the Christmas period, as the Christmas sales update which is scheduled to be declared tomorrow is likely to show like-for-like sales fell by more than 2% on a year ago for the supermarket chain, as the UK’s fourth biggest grocer was outdone by rivals such as Aldi and Lidl.

The latest figures will most likely put Morrisons under pressure and might even lead chief executive Dalton Philips to downgrade profit expectations. Currently, Morrisons stocks are trading near a 52-week low of 255p. Although, Morrisons has prepared institutional investors for a poor Christmas trading performance, pressure will grow on Dalton Philips’s position, if the bad run continues.

It is believed that Morrisons sales are suffering due to the lack of grocery delivery service and limited number of convenience stores. Morrison has been losing market share to big rivals Tesco, Asda and Sainsbury’s, as well as discounters Aldi and Lidl. Higher food prices have seen consumers cut back on groceries. Also, Morrisons has been slow to test and introduce convenience stores and is yet to make a decision on whether to offer an online service, which has multiplied its problems. Philips Dalton has announced that Morrisons will introduce 70 new convenience stores by the end of 2013. Earlier, the supermarket chain announced that it would open 20 convenience stores across the UK.

In November, Morrisons posted a further decline in sales which led to the ouster of the chain’s commercial director, Richard Hodgson, saying it had failed to get its selling points across to customers. Recently, Dalton Philips drafted in Geordie entertainers Ant & Dec to front a campaign throughout 2013 that will showcase the grocer’s skilled staff, which includes more than 5,000 trained butchers, bakers and fishmongers, that Morrisons claims is its unique selling proposition (USP).

Despite a pledge to step up discounting and tactics to draw in hard-up shoppers, including a Christmas meal, with all the trimmings from £2.49 per person, Morrisons failed to attract shoppers during Christmas.