ALL EYES will be on Morrisons on Tuesday to see if new chief executive David Potts succeeded in turning around the company’s fortunes over Christmas.
The update coincides with news that rival Asda is to invest a further £500,000 in price cuts in a bid to stem the tide of shoppers switching to discounters.
Morrisons has been hit hard by its foray into convenience stores, which were deemed to be in the wrong locations, and stiff competition from Aldi and Lidl.
Analysts expects like-for-like sales to fall by two per cent in the nine-week festive period, although this would be an improvement on the 2.6 per cent fall in its third quarter to November 1.
The group’s performance in November was dragged down by the move to limit vouchers in favour of lower prices. This resulted in prices falling by 2.2 per cent.
In September, the Bradford-based chain announced the closure of 11 supermarkets, putting 900 jobs at risk, as it reported a 47 per cent slump in half-year profits.
It also agreed the sale of 140 M local convenience stores for around £25m to concentrate on its larger supermarkets.
Analyst Clive Black at Shore Capital said: “Closed stores, simplification and deflation amount to a veritable tidal wave of barriers to driving like-for-like sales forward for the UK superstore groups, but particularly so for Morrisons.”
Morrisons is expected to post a full-year pre-tax profit of £300m, compared with a loss of £792m last year after it wrote down the value of its store estate.
Morrisons’ festive figures will be followed by updates from Sainsbury’s on Wednesday and Tesco on Thursday.
The City will be eager to hear if Sainsbury’s will make another takeover approach for Argos owner Home Retail Group, which is now valued at £1bn. Weekend reports said Home Retail shareholders want more than £1.6bn.