Morrisons expected to post another fall in quarterly sales

Analysts at Jefferies expect the country’s fourth biggest grocer to post a third-quarter like-for-like sales fall of two per cent as the firm moves from a heavy reliance on money-off vouchers to lower overall pricing.

The Bradford-based chain announced the closure of 11 supermarkets putting 900 jobs at risk as it reported its latest slump in profits in September.

It said pre-tax profits for the half-year to August 2 fell 47 per cent to £126m while like-for-like sales for the period dropped 2.7 per cent.

New chief executive David Potts said the group faced a “long journey” to turn around its fortunes.

UK supermarkets continue to fight a fierce price war, with Morrisons and its big four rivals Tesco, Asda and Sainsbury’s squeezed by discounters Aldi and Lidl.

Mr Potts took the helm in March from Dalton Philips, who was ousted 12 months after the announcement of a three-year £1bn programme to cut prices to fight the supermarket price war.

The new boss has pledged to restore the chain’s fortunes by improving its products and service levels and sharpening its pricing.

Despite an expected third quarter fall in profits, most analysts forecast the business to maintain its annual pre-tax profit target of £308m.