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First multichannel Christmas for Morrisons – but sales are still behind

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It was a first multichannel Christmas for Morrisons . But despite delivering one million online grocery orders during the course of that year and doubling the number of customers who shop in its convenience stores, the supermarket group still reported a fall in sales over the festive period.

In the six weeks to January 4, the company said today, total sales fell by 1.3%, while like-for-like sales, which strip out the effect of store openings and closures, were down by 3.1%, excluding fuel, or 3.6% when fuel prices were included. Online did play a positive role, contributing 1% to like-for-like sales growth, but that wasn’t enough to mean overall growth. In the week before Christmas, Morrisons said, on-time delivery was at 97.5%. It delivered its millionth order on the first anniversary of the launch of the online grocery service.

At the same time, it served 5m customers in its convenience store business, M Local, over the course of the six weeks, and almost doubled its customer numbers in this area during 2014. The strategy ties in with the wider move towards multichannel in the supermarket sector, with the focus on enabling shoppers to how, when and where suits them best.

Even as the supermarket unveiled its Christmas trading figures it also announced the forthcoming departure of its chief executive Dalton Philips, after five years, and the start of the hunt for his replacement.

Commenting on the figures, Philips said they were a “step-up” on previous figures and trends”. Like-for-like sales excluding fuel stood at -3.1% in the six weeks to January 4. That represents an improvement compared to the fall of 6.3% in the third quarter. “Although there is still much to do, we are building the platform to enable us to compete better in an industry that we expect to be highly competitive in the year ahead,” said Philips.

Commenting on his departure, Philips said: “Over the last five years, we have made many improvements to the business and given Morrisons strong foundations for the future.”

Incoming Morrisons chairman Andrew Higginson said: “In the next chapter of Morrisons development, we need to return the business to growth. The board believes this is best done under new leadership.”

He thanked Philips for his leadership in a time of “considerable industry turmoil and change,” and added: “He deserves particular credit for facing into and dealing with the pricing issues that have now become evident, for taking the business into the convenience and online channels, and for the steps he has taken to modernise the company’s operating systems.”

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