Morrisons has reported a 1.7% fall in like-for-like non-fuel sales for the important Christmas and New Year holiday period.
The supermarket group admitted trading conditions remained "challenging" amid consumer uncertainty for the 22 weeks to January 5. It added that the fuel market was "highly competitive", with group like-for-like sales including fuel down by 2.8%.
Chief executive David Potts said: "It was encouraging that during an unusually challenging period for sales, our execution was strong and our profitability robust, demonstrating the broad-based progress we have made during the turnaround."
He added: "As always, we will take some learnings into the new year and look forward to 2020 with a strong plan and solid foundations on which to continue to grow."
Morrisons said it had cut prices to help boost trade, but admitted it missed out after choosing not to take part in November's Black Friday offers.
The group saw flat comparable sales growth for its wholesale division over the 22 weeks, which includes tie-ups with McColl's and Amazon. Morrisons said wholesale trading was hit by lower total sales at McColl's, but added that the performance was better at the 10 stores converted to Morrisons Daily.
Arlene Ewing, investment manager at Brewin Dolphin, said: “Although Morrisons has posted a decline in sales, the drop is not as bad as some had expected. The UK grocery market has undoubtedly been tough, with intense competition from the discounters, weak consumer confidence, and high levels of promotional activity. In that environment, these are a resilient set of numbers from Morrisons.
"There, nevertheless, remain high hopes for its Daily store offering and the initial indicators look promising, with another 20 or so stores to be trialled at the beginning of 2020. All eyes will now be on results from Sainsbury’s and Tesco to see how the other members of the supermarket ‘old guard’ are faring.”
Morrisons' trading update follows that of Aldi on Monday which reported a sales increase of 7.9% year-on-year, with sales in the four weeks to Christmas Eve topping £1 billion for the first time.
