LONDON -(Dow Jones)- Wm Morrison Supermarkets PLC (MRW.LN) said Thursday it has made a satisfactory start to the year, but the economic climate for consumers is set to remain challenging as it reported a fall in first-quarter comparable sales.
Same-store sales--measuring sales from shops open more than a year--and excluding fuel and value-added tax, were down 1% in the 13 weeks to April 29. Total sales excluding fuel--which also takes into account all newly opened stores--rose 1.5%.
The retailer said the performance was broadly in line with its expectations and added that it is still confident of achieving continued profitable growth.
After signs of a fragile recovery for the retail sector in March, consumer confidence was dented last week with news that the U.K. slipped back into recession as gross domestic product shrank for the second successive quarter.
The U.K.'s No. 4 supermarket retailer by sales is a key competitor in the U.K. grocery sector, which is still coming to terms with market leader Tesco PLC's (TSCO.LN) decision to invest GBP1 billion in revamping its domestic operation following a profit warning in January.
Morrison's own fortunes have stumbled recently, with latest data from Kantar showing it lost market share in the 12 weeks to April 17, leading some analysts to blame the supermarket's keen focus on fresh food for alienating existing customers and failing to attract new ones.
After several years of trials, Morrison is rolling out its fresh food store format to around 15% of its stores by the end of the first half of 2012, a move that Chief Executive Dalton Philips believes represents a new experience for shoppers that will fend off any investment being touted by its rivals.
Shares closed Wednesday at 280 pence, valuing the company at GBP6.97 billion.
-By Peter Evans, Dow Jones Newswires; 44-20-7842-9308; email@example.com
(END) Dow Jones Newswires
May 03, 2012 02:31 ET (06:31 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.