Morrisons’ half-year results set to show a fall in profits and underlying sales

Pre-tax profits are forecast to be down by around 50 per cent to £174m, while brokers think the Bradford-based grocer’s dividend could be cut in half to 6.5p over the year.

Morrisons and Tesco have seen the heaviest sales falls among the big four supermarkets, as the sector has been squeezed by discounters such as Aldl and Lidl.

Back in March Morrisons chief executive Dalton Philips launched a £1bn investment in price cuts over the next three years.

It followed this up in May
with an “I’m Cheaper” campaign, which cut prices across 1,200 products by an average of 17
per cent, but the benefits of
these moves are yet to feed through to the grocer’s
trading.

Analysts at Deutsche Bank said Morrisons is currently the biggest market share loser among the big four due to its underdeveloped online and convenience stores, which are both growing sectors.

The broker added that Morrisons shares many of the same customers as Leeds-based Adsa and the discounters, which are all gaining market share.

It plunged to an annual loss of £176m for the year to February 2 and recently announced it was slashing 2,600 jobs as part of a drive to modernise the way its stores are managed.

Mr Philips was subjected to a humiliating dressing down at the firm’s AGM when former boss Sir Ken Morrison compared his strategy with the manure produced by his cattle herd.

In other results, fashion retailer Next is expected to extend its lead over Marks & Spencer when it posts results on Thursday.

The group said in July it expects sales for the first six months of the financial year to jump 10.7 per cent. It said revenues are driven by its Next Directory and increased store sales.