MORRISONS has reported another fall in sales highlighting the challenges facing its new chief executive as giant supermarket chains battle discounters.

The Yorkshire-based group said sales at stores open over a year, excluding fuel, fell 2.9 percent in the 13 weeks to 3 May.

The results were the first announced by Morrisons since David Potts took charge of the group, which has 62 stores in Scotland out of a group total of 500.

A former executive at Tesco, Mr Potts succeeded the sacked Dalton Philips on March 16 after a year in which Morrisons slumped to a loss of £792 million.

With the fall in sales in the first three months of the current year following a 2.6 per cent drop in the preceding quarter, analysts said the results showed Mr Potts has a tough task on his hands.

"It's an uphill challenge reinvigorating Morrisons' fortunes," said Himanshu Pal, director of retail insights at researcher Kantar Retail. Mr Pal said Morrisons is underrepresented in the online and convenience channels. Morrisons has two M Local stores in Scotland and 60 supermarkets.

The big four chains are fighting for market share in their core supermarket businesses, as discounters like Aldi and Lidl lure customers away. The resulting price cutting is putting pressure on margins.

Morrisons trails market leader Tesco, Wal-Mart's Asda and Sainsbury's in annual sales.

On Wednesday, Sainsbury's reported a £72 million bottom-line loss, a fortnight after rival Tesco racked up a deficit of £6.4 billion. Both chains were driven into the red by the lower value of their store estates.

Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, noted that Mr Potts has launched a strategic review that will not be completed until September, giving Tesco time to implement plans it has developed.

Mr Potts has already said he intends to axe up to 720 jobs from the Bradford head office as part of a drive to beef up staff on shop floors.

Morrisons said it closed more stores than it opened during the 13 weeks to 3 May, leading to a reduction in selling space of more than 50,000 square feet. It did not close any stores in Scotland.

The restructuring moves will result in one-off costs of between £30 million and £40 million in the current financial year.

However, Mr Potts said the group had already started to make progress with efforts to increase its appeal among shoppers.

"Our priorities are to improve the customers' shopping trip and make our core supermarkets strong again," he said.

"We are listening hard to customers and colleagues and, wherever possible, we are responding quickly."

The group said it is in a strong financial position. Net debt fell by around £150m in the first 13 weeks, to £2.2bn compared to £2.3bn at the end of the preceding year.