Market researcher Kantar Worldpanel said Morrisons' sales fell 3.2 percent in the 12 weeks to March 2 compared with the same period the year before, with its market share contracting to 11.1 percent from 11.8 percent.
Its sales had declined 2.5 percent in the 12 weeks to Feb.2, Kantar said last month.
Over the key Christmas period Morrisons was by far the worst performer among Britain's so-called "big four" grocers, which also includes market leader Tesco, Wal-Mart's Asda and J Sainsbury.
It has continued to struggle, also hurt by its late entry into online shopping and local convenience stores - the two fastest-growing retail channels.
Morrisons is expected to report its lowest annual profit in five years on Thursday and could also detail plans to sell some of its freehold property and return surplus cash to shareholders.
Kantar said that among the big four, Sainsbury's was the only grocer to hold its market share year-on-year at 17.0 percent and match the overall market sales growth of 2.2 percent.
Tesco's market share fell to 28.7 percent from 29.6 percent, as its sales fell 0.6 percent, while Asda's share fell to 17.5 percent from 17.8 percent, on sales up 0.3 percent.
In contrast Aldi's year-on-year sales growth rate accelerated to a record 33.5 percent, giving it a market share of 4.3 percent, while Lidl held on to the record 3.2 percent share it reached last month.
Upmarket grocer Waitrose shrugged off the pressure from the discounters with its highest ever market share of 5.0 percent.
"Over the past three years Waitrose, Aldi and Lidl have taken a combined 3.5 share (percentage) points from the competition which equates to 4.4 billion pounds ($7.3 billion)per year," said Kantar director Chris Longbottom.
"This has put pressure on the big four supermarkets to compete for a shrinking middle ground and cut prices to directly combat the discounters."
Tesco, Asda and the Co-operative have all announced price-cutting initiatives in recent weeks and analysts expect Morrisons to do the same on Thursday.
Kantar said grocery inflation was 1.9 percent for the 12 week period - the lowest level since July 2010. Separately on Tuesday data from the British Retail Consortium showed UK retail sales slowed markedly in February after a robust January, as food sales stagnated.
