Morrisons (LON:MRW) have reported that their sales have fallen in their update dating to January 5.

The firm said that challenging trading conditions coupled with consumer uncertainty were the largest contributors to the slump in sales.

Morrison’s said that said like-for-like sales, excluding fuel, were down 1.7% year-on-year.

Additionally the decline was further accelerated by a fall in retail sales, as a like for like performance in the wholesale unit remained flat.

Notably, fuel sales declined 2.8% year on year across the 22 weeks period, and total sales dipped 2.9% but the figure totaled 1.8% without fuel sale considerations.

Shareholders should be not so concerned, as the firm said reiterate its full year guidance.

Morrisons said that pretax profit before exceptional costs should remain within the forecasts made by both analysts and market forecasts.

The firm ends its financial year on February 2, and shareholders will be keen to see annual reports in what seems to have been a tough year of trading for British retail.

The company said: “We managed costs well throughout the period, offsetting some of the impact on like-for-like sales of the challenging trading conditions and continued uncertainty amongst customers.”

Morrisons added “Throughout the period, trading conditions remained challenging and the customer uncertainty of the last year was sustained,”

During the 22 weeks, Morrisons said that they closed four underperforming stores, but this was offset by the opening of four new ones.

Morrisons explained: “The new stores include Canning Town, which is our first store with a Market Kitchen food-to-go offer, and Bolsover, our first smaller, community store format.”

Additionally, the company also recently sold a store in London to Berkeley Group Holdings (LON:BKG) in a reported £120 million deal.

On this deal, the firm said “Berkeley will pay £85 million in stages over the years of the project, and will build a new Morrisons supermarket and convenience store on the site at a cost to Berkeley of around £35 million.”

Chief Executive David Potts comments

“It was encouraging that during an unusually challenging period for sales, our execution was strong and our profitability robust, demonstrating the broad-based progress we have made during the turnaround.

“This was again down to the hard work of Morrisons exceptional team of food makers and shopkeepers. As always, we will take some learnings into the new year, and look forward to 2020 with a strong plan and solid foundations on which to continue to grow.”

Political uncertainty hits British supermarkets

Morrisons joined Walmart (NYSE:WMT) owned Asda in citing political and economic uncertainty as a contributor to slowing sales.

Asda said its gross profit rate fell, reflecting price markdowns in clothing following a slow summer season versus last year.

The fall in gross profit rate, plus increased operating expenses, meant operating income was also lower.

“This quarter has afforded consumers little respite from political or economic uncertainty and this has shown in their spending,” said Chief Executive Roger Burnley.

Morrisons follow in same step as rivals

Morrisons have followed in the same step as rivals in seeing their profits decline in what seems to be a very volatile period of trading.

At the start of November, rival Sainsbury’s (LON:SBRY) revealed a decline in profits in its half year results.

The firm said that, for the 28 weeks to 21 September, underlying profit before tax declined by 15% to £238 million, compared to the £279 million figure recorded for the same period the year prior.

Retail sales (excluding fuel) were down 0.6% and like-for-like sales (excluding fuel) were down 1%.

Shareholders of Sainsbury would have been compensated when the firm later that week revealed it had struck a wholesale deal with Coles (ASX:COL).

Sainsbury’s said: “The agreement with Coles marks a key milestone in Sainsbury’s strategy to build its wholesale business, with a number of partnerships already in place in Asia, Europe and the UK.

Greg Davis, Coles chief executive of commercial and express, said: “We want to accelerate the introduction of innovative products to Coles own brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia.”

Additionally, Marks and Spencer (LON:MKS) saw their profits plunge in November, which saw shares in red.

Chief Executive Steve Rowe alluded to several factors which had caused the slump including blamed the 5.5% decline in like-for-like clothing sales in the first six months of its financial year on supply chain problems and buying errors that meant popular sizes quickly sold out in store and online.

M&S reported a 17% decline in pre-tax profits of £176.5 million on sales of £4.9 billion.

M&S said the store closures would reduce clothing sales by 2% rather than the 3% previously thought but warned that its profit margins would come under pressure in the second half.

It seems that shareholders have not been too concerned about the performance of Morrisons as shares have remained in green, however there will be a hope that fortunes can be turned around.

Shares in Morrisons spiked 2.55% to 197p on Tuesday morning. 7/1/20 10:37BST.