Bradford-based supermarket giants has reported a fall in sales of 2.6% over the first quarter of the year.
The performance, on a like for like basis, included fuel sales though total sales contracted by just 0.3% as new store openings bolstered business.
The company, which trails market leader Tesco, Asda and Sainsbury's in market share, said sales at stores open over a year fell 1.8% when fuel was excluded in the 13 weeks to May 5 - an improvement on the fourth quarter decline of 4.1%.
"This performance reflects a steady improvement from the previous quarter and is in line with our expectations," the firm said.
Morrisons said plans to launch an online food operation by January 2014 were progressing, adding that talks with online grocer Ocado on a possible tie-up were continuing.
Morrisons is introducing cash-handling systems and technology which will improve the efficiency of cash office operation in its 490 stores.
The introduction of new technology is an ongoing programme to ensure that Morrisons continues to improve its competitiveness.
The new technology will simplify the operation and mean that cash can be automatically counted.
As a result, Morrisons has begun to consult with 689 cash office managers and supervisors about a proposal to remove management and supervisory positions in cash offices in stores.
Morrisons will support its colleagues throughout this consultation process.
Nearly 700 jobs are at risk at Morrisons. The Bradford-based supermarket is looking to cut costs after a fall in annual profits. Its 2012 profits fell by 7% to £879 million.
Morrisons is the fourth biggest supermarket in the UK. It is rolling out new machines to replace manual cash-counting in its back offices and has started a four-week consultation with 689 cash office managers and supervisors across its 490 stores.
The latest job cuts follow its decision to axe 165 roles at its headquarters six months ago by outsourcing financial transaction processing to an Indian firm.
The introduction of new technology is an ongoing programme to ensure that Morrisons continues to improve its competitiveness. The new technology will simplify the operation and mean that cash can be automatically counted."
Morrisons has admitted that its performance fell short of expectations after reporting a 7% drop in full-year profits to £879 million.
The supermarket, which generated sales of £18.1 billion in the year, said it had not done enough to communicate its promotions and suffered because it still lacked a meaningful presence in the two fastest growing sectors of the market.
The UK's fourth-biggest grocer, which employs 129,000 staff at 498 stores, said like-for-like sales dropped 2.1% in the year, while the average of 11.4 million customers in its stores each week was down on the prior year.
The sustained pressure on consumer spending was reflected in our like-for-like sales performance, which was not as good as it should have been. We have implemented a range of measures to address this and are making good progress in improving our promotional effectiveness and in communicating our points of difference.
Recent events have underlined why it's so important that we tell our customers how and why we're different and what our vertical integration really means for them. Food quality, provenance and the issue of trust are at the forefront of consumers' minds and these are all areas where Morrisons has something genuinely different to offer.
Morrisons preliminary results show underlying profits before tax down 4% to £901m with like-for-like sales (excluding fuel and VAT) down 2.1%.
It marks the first fall in full-year profits for six years.
The deal by Morrisons to buy 49 Blockbuster stores and rebrand them as Morrisons M local convenience stores will not prevent any of the job cuts already announced by the DVD chain's administrators Deloitte even though the supermarket plans to reopen them by the summer.
The stores which have been bought are among 164 earmarked for closure by Deloitte last week, threatening around 800 jobs and following 168 shop closures and 760 job cuts that had already been announced.
Blockbuster, which had 528 stores and employed 4190 staff, collapsed into administration last month after struggling to adapt to the changing market and rivalry from internet retailers including Netflix, Amazon's LoveFilm and iTunes which now offers a movie rental service.
The head of Morrisons' convenience store operation says the Bradford-based chain is hoping to take advantage of a growing demand for smaller high-street supermarkets. Gordon Mowat's comments follow the announcement that the chain has bought 49 former Blockbuster stores which will be rebranded.
We are rolling out the Morrisons M local estate at pace this year and these acquisitions give us a kickstart in securing a solid foothold in this key sector. The convenience market is growing as more people shop locally and we want to be in a position to take advantage of this.
Morrisons hopes to have at least 70 convenience stores by the end of 2013 and is also expected to announce moves towards a full-scale online food delivery service alongside its annual results in March.
The chain reported a 2.5% decline in like-for-like sales in the last six weeks of 2012, following a 2.1% decline the previous quarter.
Bradford-based supermarket Morrisons has bought 49 stores from the failed DVD and games rental chain Blockbuster to expand its convenience store business. The shops will be rebranded as Morrisons M local and could be open by the end of the year.
Morrisons says it hopes to create around 1000 jobs when it reopens the new shops which will be mainly in London and the South East. The announcement follows the supermarket's recent acquisition of seven former Jessops stores.
The Bradford-based supermarket chain Morrisons says its Christmas profits were lower than expected. Trading fell by 2.5% compared with the same period last year.