Morrisons has reported a 3.1% fall in like-for-like sales, excluding fuel, for the six weeks to 4 January, as it revealed that CEO Dalton Philips is leaving the business.

The results mark Morrisons out as the worst performing of the major grocers over the Christmas period, but were not as bad as many city watchers had predicted. Most forecasters had believed Morrisons like-for-likes would fall 3.8%.

Morrisons confirmed that it also plans to close 10 unprofitable stores this year. The retailer said it could not provide an exact timeframe for the closures as a consultation with impacted staff was beginning today. The stores are all Morrisons’ small supermarket formats with a combined size of 80,000 sq ft and less than £50m in annual sales. A total of 409 staff will be affected, and Morrisons said it would look to accommodate as many employees as possible in other parts of the business.

Total sales excluding fuel were down 1.3% while the retailer said that after passing on the benefits of lower oil prices to customers, total sales including fuel were down 3.6% and LFL sales including fuel were down 5.2%.

The retailer’s online operation contributed 1.0% to LFL during the period.

Morrisons said it saw improvement in its operational KPIs. Items per basket improved from -2.4% year-on-year on Q3 to -0.2%, and number of transactions from -3.3% to -1.7%. It said that Black Friday impacted the start of the reporting period it claimed but LFL and volume performance was stronger in the last four weeks, the key trading period for food.

“I would like to thank colleagues for delivering a stronger Christmas proposition for our customers. Our like-for-like sales were a step-up on recent quarters and trends in the key operational measures continued to improve,” said Philips.

“Our three-year cost saving and cash flow targets remain on track. Although there is still much to do, we are building the platform to enable us to compete better in an industry that we expect to be highly competitive in the year ahead.”.

It said its online business achieved industry-leading customer service metrics. “Even during the busy pre-Christmas week, on time delivery was 97.5% and product substitutions were just 1.4%.”

Philips will remain as CEO until mid-March as the retailer embarks on the search for a replacement. Andrew Higginson will take over as chairman from Sir Ian Gibson on 22 January.

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