Morrisons revealed a deeper slump in sales today as the effects of a price war in the supermarket sector continued to bite.
The Bradford-based chain said like-for-like sales - trading in stores open for longer than a year - dived by 7.1% in the 13 weeks to May 4. This was much weaker than the 4.5% drop forecast in the City and meant overall sales were down by 4.2% in the first quarter of its financial year.
Last week, Morrisons launched an "I'm Cheaper" campaign which cut prices across 1,200 products by an average of 17%.
The move came after Britain's fourth biggest supermarket stumbled to a £176 million annual loss in March and issued a profits warning, sending shares down 12%.
Neil Saunders, managing director of retail consultancy Conlumino, described the latest figures from Morrisons as woeful, particularly as they followed a 1.8% decline in the same period a year earlier.
He said: "The issue for Morrisons is that if its price cuts do not deliver increased volume, they will simply have a negative impact on profitability and will weaken the chain still further. Sadly, we believe this is a distinct possibility."
The firm is planning to invest £1 billion over the next three years to improve its competitiveness and will also launch a new loyalty card scheme. Morrisons chief executive Dalton Philips said today: "The plans we set out at our results in March are on track.
The reaction of our customers to the 1,200 'I'm Cheaper' price cuts we announced last week has been very positive.
The business maintained its underlying full-year profit before tax range of between £325 million and £375 million.
"Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers."
The big four supermarkets - Tesco, Asda, Sainsbury's and Morrisons - have seen their sales squeezed in recent years between discount retailers such as Aldi and Lidl and upmarket rival Waitrose.
Morrisons added that its fledgling online sales business had done well in Warwickshire and Yorkshire and would begin deliveries in London next Monday.
The supermarket said that by the year-end its online business will reach up to 50% of UK households and, together with its smaller convenience stores, is expected to account for more than £500 million of sales per year.
The criminal inquiry into the data theft from Bradford-based Morrisons is being led by West Yorkshire Police.
Detective Chief Inspector Nick Wallen said: "We are aware of the situation and are supporting Morrisons and their investigation into these matters."
It is the latest blow to Morrisons, a day after it announced that it had plunged into the red for the year to February 2, a year after reporting pre-tax profits of £879 million.
Earnings were wiped out amid declining sales and exceptional costs of £903 million from write-downs on the value of its stores and the planned sale of its poorly-performing children's wear retailer Kiddicare.
Like-for-like sales fell 2.8% as Mr Philips pledged a fresh strategy to take on the threat from discounters Aldi and Lidl by slashing prices.
He said the grocery sector was facing the biggest structural shift since the advent of supermarkets in the 1950s.
Mr Philips said Morrisons had the most to lose as shoppers were now choosing to save by using the likes of Aldi and Lidl even if they were no longer struggling to make ends meet as the economy improved.
The store is to invest £1 billion over the next three years to improve value and competitiveness and will also launch a new loyalty card scheme.
It began rolling out an online grocery offering just eight weeks ago, many years later than rivals, and is also concentrating on increasing its smaller convenience stores while scaling back new supermarket plans - expecting not to build any after 2015/16.
A Facebook post for staff said: "The information included names, addresses and bank account details of colleagues. This affects colleagues from all levels of the organisation.
"We are taking this extremely seriously. Dalton Philips is leading the response."
But one person commented on the site: "I haven't been informed of this and shouldn't have to read it on here."
The supermarket said in a statement: "On Thursday March 13 Morrisons was made aware that data from its staff payroll system had been stolen, published on the internet and sent on a disc to a newspaper.
"This data theft included bank account details. Morrisons immediately ensured it was taken off the website.
"Initial investigations suggest that this theft was not the result of an external penetration of our systems. We can confirm there has been no loss of customer data and no colleague will be left financially disadvantaged.
"We have already informed our colleagues about the theft and we are helping them take the appropriate actions to safeguard their personal data."
Morrisons said it was urgently reviewing internal data security measures.
It was working with cybercrime authorities and police to identify the source of the theft and experts had been brought in to ensure staff did not suffer financial losses.
The supermarket has also informed UK banks of the data theft and is working them to help them maintain account security, and it is setting up a helpline for employees.
Struggling supermarket Morrisons suffered a fresh blow today after payroll data relating to thousands of employees, including bank account details, was stolen and published on a website.
It comes a day after Britain's fourth biggest supermarket tumbled to a £176 million annual loss and issued a profits warning, sending shares down by 12%.
Morrisons said police had been informed of the data theft, which affects staff from all levels of the organisation including the board, but would not comment on whether chief executive Dalton Philips was among them.
The supermarket said it became aware of the data theft last night, hours after it announced financial results to the City and that Mr Philips was leading the response.
It wrote to all employees via email to inform them of the data theft, while managers were also informing workers at its sites.
The company posted a Facebook statement, but some staff voiced disquiet that they learned of the breach in this way.
It said: "We are very sorry that this has happened. We will ensure that no colleague will be left financially disadvantaged as a result of this theft."
Morrisons did not say how many of its 130,000 employees were affected.
The launch will see the retailer use Ocado's recently opened distribution centre in Warwickshire for deliveries through a Morrisons-liveried fleet.
The 25-year deal involves Morrisons paying up to £170 million to Ocado to acquire the site and equipment.
This agreement is a significant strategic step for Morrisons.
From a standing start, Morrisons will be competing in the fast-growing online channel by the end of this year with a really compelling proposition.
The customer gets our affordable fresh food delivered by Ocado's state-of-the-art distribution system.
Supermarket Morrisons is to start its online groceries business by the end of this year after unveiling a tie-up with delivery firm Ocado.
Ocado is closely linked with Waitrose, exclusively delivering the supermarket's products - as well as its own and those of branded ranges - to its customers and the move is likely to spark a backlash.
Mark Price, managing director of Waitrose, recently told The Sunday Telegraph its lawyers would seek to examine any tie-up between the other two companies.
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."