Morrisons' sales hit by lack of online service

Morrisons shopping bags
Image caption Morrisons plans to launch its online service in January

Morrisons, the UK's fourth-largest supermarket chain, has reported a 2.4% fall in like-for-like sales, excluding fuel, in the three months to November.

The supermarket said its sales were continuing to suffer because it does not yet offer online deliveries, and it has only a small number of convenience stores.

Convenience stores are currently a major growth area for supermarkets.

Morrisons is planning to launch its online service in January next year.

It will start food deliveries in Warwickshire, before rolling out the service to other parts of the country. It says it hopes to cover 50% of households by the end of the year.

The company is also expanding its chain of "M local" convenience stores, and opened 36 new stores in the past three months, bringing its total to 69. It plans to open a further 100 M local stores in the 2014-15 financial year.

"Consumer confidence remains subdued and we continue to see heavy promotional activity across the industry," Morrisons said in a statement.

"As previously indicated, our low exposure to the sector's key growth areas of convenience and online continues to impact the sales performance of the group."

The company said the sales performance was in line with its expectations, although it was worse than many analysts had expected. It said its outlook for the full financial year was unchanged, but said it expected the market to remain "challenging".

Morrisons is the UK's fourth-largest supermarket in terms of revenues, behind Tesco, Asda and Sainsbury's, all of which already have online offerings.

Online grocery shopping is currently growing at a rate of about 16% a year, while the convenience store sector is growing at about 20% a year.

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