The dip came after a poor H1 performance from the supermarket chain, when LFL sales fell by 0.9%.
Clive Black from Shore Capital pointed out that the figure included uplifts from the conversion of stores to the Fresh Format, of which 35 have been completed in the weeks to 13 October 2012, “and implied a materially weak volume picture,” he said.
Black noted there was expected to be an increase in sales (by 4%-6%) from the Fresh Format stores, but said: “The performance of non-converted Morrisons outlets is likely to be that bit weaker still – LFL volumes may be down by 4%-5%.”
Kantar Worldpanel director Edward Garner said the performance of Morrisons would cause concern. He added: “Recent announcements about the development of online and convenience, which are the two fastest-growing grocery channels, will no doubt be given added urgency as these channels continue to deliver growth for competitors.”
Black also speculated that Morrisons’ problems were likely to be caused by doing “too much too young” and through making changes. However, Black also said that some changes, such as the M-Kitchen and NuMe ranges, had added a boost to Morrisons’ offer.
Black finished: “Shore Capital notes that Morrison has announced that its commercial director, Richard Hodgson, is standing down from day-to-day duties, his role being assumed by long-standing company executive Martyn Jones. Such a development does not suggest to us, at least, a totally harmonious senior team.”