Embattled supermarket chain Morrisons insisted it was "moving at pace" to turn around trading as it revealed another hefty slide in sales.
The UK's fourth biggest grocer said like-for-like sales dropped 2.6%, excluding fuel, in its third quarter to November 1. Including fuel, same store sales were 5.1% lower.
Morrisons said the slide came as it continued to cut back on promotional vouchers, which impacted sales by at least 2.4% over the three months.
The fall in sales is steeper than the 2.4% seen in the previous three months.
The group's performance was dragged lower by its move to cut back on vouchers in favour of lower prices in store.
It said this saw overall prices fall by 2.2% compared with a year earlier, not including lower fuel prices at its forecourts.
Chief executive David Potts, who took the helm in March from Dalton Philips, said: "The business is moving at pace on the long journey towards improving the shopping trip for customers.
"Our priorities for the rest of the year are unchanged - to stabilise trading, reduce costs and further improve the capability of the leadership team."
He added the group was "making good progress in many areas and customers are noticing improvements".
In September, the Bradford-based chain announced the closure of 11 supermarkets, putting 900 jobs at risk, as it reported a 47% slump in half-year profits.
The day before, it said it had agreed the sale of 140 M local convenience stores for around £25 million to concentrate on its larger supermarkets.
Morrisons reiterated it is expecting underlying profits to increase on the first half, when they slumped to £126 million.
But it is facing a tough challenge to boost trading, as the latest figures revealed not only a fall in prices, but also hefty declines in the number of sales, with items per basket down 1.9% and the number of transactions 2% lower in the third quarter.
Sales from its online operation - which launched at the end of 2013 - contributed 1% to the third quarter like-for-like sales.
UK supermarkets continue to fight a fierce price war, with Morrisons and Big Four rivals Tesco, Asda and Sainsbury's squeezed by discounters Aldi and Lidl.
Mr Philips was ousted 12 months after the announcement of a three-year, £1 billion programme to cut prices.
Mr Potts has pledged to restore the chain's fortunes by improving its products and service levels and sharpening its pricing.
Since taking over at the top, he said Morrisons had been 15 years late entering the convenience store sector in 2011 and added that one lesson from its experience was ''don't hang around''.
But just a few weeks after announcing the sale of the convenience stores, Morrisons re-entered the market with a pilot to put five stores in filling station shops owned by Motor Fuel Group.
Shares in Morrisons fell more than 1% after the trading update.
John Ibbotson of consultancy Retail Vision said the supermarket was "delusional" to believe it was making progress, given the poor third quarter figures.
He said Morrisons could become a takeover target.
"It's hard to see Morrisons ever making a full recovery, and it's potentially ripe for takeover. Only question is, who will buy it?" he said.
"Morrisons is entering the critical Christmas period in near critical condition," he added.
But analysts at Jefferies said a "stronger Morrisons is emerging", with recovery efforts paying off by improving the customer experience.