Supermarket chain Morrisons boasted of a 'solid start' to the year despite reporting a fall in its quarterly sales.
The UK's fourth largest supermarket's like-for-like sales excluding fuel, which strips out the effect of new store openings, declined 1.8% in the first three months of the year, as it continues to struggle to keep its customer base amid the growing competition in the retail sector.
Total sales excluding fuel rose 0.6%.
However, Morrisons maintained that it has had 'a solid start to the new financial year' despite drop in sales.
"We have made a solid start to the year, with our sales performance improving since the last quarter. Our promotions have been more innovative and we are explaining Morrisons points of difference more effectively," said the grocer in a statement.
Morrisons said its discussion with internet grocer Ocado for a possible tie-up is continuing as the company plans to launch its first online food operation by January 2014.
"Strategically, our ambition of building a genuinely multi-format, multi-channel Morrisons is right on track," said Chief Executive Dalton Philips.
Philips said the horsemeat scandal helped drive increasing customer recognition of Morrisons unique supply chain and approach to meat sourcing.
"They now understand that Morrisons is best placed to sell food that is what it says it is".
During the quarter, Morrisons opened six stores and also acquired over 80 stores to add to its convenience store pipeline. It is on track to meet the target of 100 stores by the end of the year, with 20 opening in the first half, the company said.
Earlier, Sainsbury's reported a 1.4% decline in full-year pre-tax profit to £788m ($1.2bn; €931m), despite a rise in sales.