Morrisons’ like-for-like sales fell 5.6% excluding petrol over the Christmas period, and the grocer warned it now expects full-year profit to be at the lower end of expectations.

In the six weeks to January 5, Morrisons reported total sales excluding petrol were down 1.9%.

Morrisons chief executive Dalton Philips said: “In a very tough market our sales performance over Christmas was disappointing. However, we are firmly focused on driving our core business and accelerating our penetration of the fast-growing channels. Our convenience business is building towards an operation of scale and the first food deliveries of will be made tomorrow, reaching half of UK households by the end of the year.”

Morrisons said the tough conditions were intensified by its under-representation in convenience and online and by targeted couponing.

The grocer has 85 convenience stores and is targeting 200 by the end of 2014/15.

Morrisons said the sales environment continues to be very challenging, and it is managing its business “very tightly”.

Shore Capital analyst Clive Black said: “Morrison has surprised us with a quite awful trading update. Hard-pressed consumers have decided to shop elsewhere. Such trade is a million miles away from management’s aspired positive fourth-quarter like-for-like sales. If we take inflation into account, then the volume position is truly disastrous, with negative operational gearing, compounded by vertical integration, eating into margin.”