Morrisons admitted today that its Christmas sales were below par after feeling the heat from rivals in a "highly promotional" market.
The UK's fourth-biggest supermarket group , which employs around 130,000 staff at 455 stores, reported a 2.5 per cent decline in like-for-like sales for the six weeks to December 30, which it described as disappointing.
But Morrisons said the sales fall, which follows a 2.1 per cent decline in the previous quarter, would not prevent it from meeting profit expectations.
Analysts believe Morrisons has struggled to compete because of its lack of grocery delivery service and small number of convenience stores.
Morrisons said: "The environment over the Christmas period has continued to be challenging with hard-pressed consumers increasingly shopping to a budget and vouchering a prominent feature of a highly promotional market."
However, the company, which last week announced an advertising deal with TV presenters Ant and Dec and sponsorship of hit shows Britain's Got Talent and Ant & Dec's Saturday Night Takeaway credentials,.admitted it has not done enough to advertise its promotions and communicate its points of difference.
A move into online shopping is expected later this year, while the company hopes to have 70 convenience stores by the end of 2013.