Morrisons has revealed a slowdown in sales growth for the latest quarter amid “softer” market conditions.
The supermarket group said its like-for-like sales, excluding fuel and VAT, grew by 2.9% in the three months to July 28.
It represented an easing from 4.1% growth in the previous quarter as food and drink inflation reduced.
Nevertheless, bosses said its share of UK grocery market “stabilised” as investment into pricing helped the company face off competition from German discounters Aldi and Lidl.
The retailer also confirmed that it will raise its minimum pay for store workers to £12 next month as part of a £151 million investment.
Rami Baitieh, chief executive of Morrisons, said: “Our focus on listening to customers, better availability and improving the Morrisons More Card has driven another quarter of good headway across the board.
“Like-for-like sales remained positive, the switching data improved year-on-year and although the market was noticeably softer in Q3, our relative position improved and our market share stabilised.
“Our price competitiveness improved further in the quarter as our Aldi and Lidl price match, More Card offers and everyday low prices combined to give customers increasing confidence in Morrisons’ great value.”
Earlier on Thursday, Morrisons agreed a £331 million property deal as part of efforts to slash its significant debt pile.
The private equity-owned retailer said on Thursday that it expects to complete the “ground rent financing” deal around October 2.
It said Morrisons will sell 76 properties to an undisclosed business, before these are then leased back to the retail firm.
Sky News reported that real estate investor Song Capital is the buyer.
Morrisons, which was bought by US private equity firm Clayton, Dubilier & Rice in 2022 for £7 billion, is the fifth-largest supermarket chain in the UK.
The deal comes amid efforts by Morrisons to reduce its heavy debt pile, although the company said the way it will use the proceeds of the deal is “under consideration”.
It most recently reported a debt burden of about £4 billion, although this is down significantly from a peak of £6.2 billion.
Debts were reduced by the proceeds of the £2.5 billion sale of its petrol station business to Motor Fuel Group, the forecourt giant also owned by CD&R.
It has also been pushing forward with a major cost-cutting programme under Mr Baitieh.
