Morrison Third-Quarter Growth Slows

Morrison, which has had its chief executive poached by retailer Marks & Spencer, said falling food price inflation knocked sales growth in its third quarter, but it was still winning customers.

Britain's fourth-biggest supermarket group said on Thursday sales at stores open at least a year, excluding petrol and VAT sales tax, rose 4.3 percent in the 13 weeks to November 1.

That is down from 7.8 percent in the first half and below the average forecast of 4.6 percent in a Reuters poll.

However, the group said the slowdown was due to slowing food price inflation which has been affecting all supermarket groups.

"Our underlying sales performance in the period has been consistent with the good growth we experienced in the second quarter," it said in a statement, adding it served an average 10.8 million customers a week during the third quarter, up by more than 1.6 million from two years ago.

"Our expectations for the current year remain unchanged."

Morrison said on Wednesday Chief Executive Marc Bolland, who has been credited with turning the firm round after its botched takeover of Safeway in 2004, would stay until the end of January and it would look for a successor inside and outside the company.

Its shares, which have lagged the DJ Stoxx European retail index by 17 percent this year as investors favour more cyclical stocks, closed down sharply at 280.9 pence, valuing the business at 7.9 billion pounds.

Morrison has been the fastest-growing of Britain's four big supermarkets for most of the past two years, helped by its focus on low prices, innovative promotions and the popularity of its "Market Street" fresh food counters.