Morrisons has been urged to bolster its value credentials to outmuscle rivals and return to like-for-like growth.
The grocer, which reveals first-quarter results to May 5 next Thursday, has “sharpened its value pencil in 2013” but needs to push further to break into growth, according to Shore Capital analyst Clive Black.
Morrisons has underperformed the grocery market since the final quarter of 2011 and the analysts’ consensus is for a 2% fall in like-for-like sales in the first quarter.
Black said: “Morrisons has introduced some punchy, product-specific promotions this year and there are indications that this has translated to basket size.
“It lost touch with its core customer but more pertinent promotions have helped and need to continue.”
Jefferies equity analyst James Grzinic said its sponsorship of Britain’s Got Talent and its Payday Bonus promotion are “filtering through to a more resilient footfall performance”.
Kantar Worldpanel data released last week revealed Morrisons held an 11.5% share of the grocery market, down from 11.9% year on year.