Like-for-like sales at Morrisons fell by 2.4 per cent, excluding fuel, while total sales rose inched up one per cent in the three months to November.
The Bradford-based grocer said its low exposure to key growth areas of convenience and online had continued to impact the sales performance of the Group.
The fourth largest UK supermarket have opened 36 M local convenience stores (C- stores) this quarter, bringing the total to 69, and aims to have 100 M Local stores open by the end of the year.
Citing the South-East and London as key areas for growth, Morrisons confirmed they intend to open a further 100 M locals in 2014/15 and has invested heavily into its new Fresh format concept.
Greg Bromley, consultant at Conluminio says C-stores will be crucial in driving the business forward in the months to come but warned of potential problems.
“Issues exist here (in C-store expansion) with higher running costs at these stores pushing prices up, conflicting with the retailer‘s value-focused proposition,” he said.
“It needs to continue allying this with its commitment to low prices to ensure its success is guaranteed in this growing market.”
Having been forced to play catch-up with Tesco, Sainsbury‘s and Asda, who have been growing their online business since the 90s, Morrisons signed a multi-million pound deal with Ocado in July, who currently serve Waitrose‘s online groceries.
The grocer plans to launch its online service in January 2014.
Online food deliveries will start in Warwickshire and will be rolled out to other parts of the country including the North West. It hopes to cover 50 per cent of households by the end of the year.
Dalton Philips, Chief Executive, said he was very confident that its online service would live up to promise.
“We continue to grow our sales in this tough market whilst making great progress on our strategy to be a multi-channel retailer,” he said.
The online sector will rapidly grow by 98 per cent over the next five years, according to IGD.