Wm Morrison has become the latest big company to scrap its final salary pension, as the supermarket chain announced a better-than-expected 8.2 per cent jump in first quarter like-for-like sales.

From July, the pension received by the 10,000 staff in the group’s retirement scheme will be based on an average of what they earn over their whole career rather than the amount they earn in their final year of employment.

The disclosure came only a day after Barclays announced plans to scrap final salary pensions for 18,000 long-serving staff.

Barclays made its announcement a day after BP said that it would shut its UK final salary scheme for new recruits, leaving only a handful of FTSE 100 companies offering such a scheme to new employees.

Although most private employers have closed their so-called defined benefit, or final salary, schemes, very few have taken the more drastic action of closing them to existing investors.

But poor investment returns and rising life expectancy have sent deficits in such schemes soaring and pension experts expect a wave of blue-chip companies to water down retirement benefits in the coming months.

In a statement yesterday, Morrison said that it would “move all future benefit accrual onto a career average basis, such that it will grow in line with inflation rather than being linked to final salary”.

Morrison’s scheme has already been shut to new workers.

Changes to the group’s pension plan came as it reported strong sales growth as cash-strapped customers continued to opt for its cut-price food.

The rise in underlying sales, excluding fuel, in the three months to May 3, is the same as the 8.2 per cent like-for-like rise chain recorded in the year ended February 1.

Total sales for the first quarter, again excluding fuel, rose by 9.2 per cent.

"Our broadening customer appeal saw us welcome half a million more new customers each week to our stores during the first quarter," Marc Bolland, the chief executive of Wm Morrison, will tell investors at the retailer's annual meeting today.

During the first quarter, Morrison cut the price of 8,000 products and opened two new stores.

When fuel is included, first-quarter like-for-like sales increased by 5 per cent, while total sales increased by 5.7 per cent.

Both Morrison and Asda, which is owned by Wal-mart, are continuing to steal market share from its rivals, such as Tesco.

According to Nielsen, the research group, during the 12 weeks to March 21, Tesco’s underlying sales rose by 3.3 per cent, far below the 6.9 per cent increase recorded by Morrisons and Asda’s 6.7 per cent upturn.

Upmarket retailers such as Waitrose and Marks & Spencer have introduced cheaper ranges of food to attract customers, but sales growth is far below their cheaper rivals.

During the same 12-week period, Waitrose’s underlying revenue growth was 1.3 per cent and Marks & Spencer’s was 2.6 per cent, Nielsen said.

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