Investors in Morrisons were left scratching their heads this week as the Bradford-based grocer was relegated from the FTSE 100 index of top UK firms.
Its shares are lower than a year ago, even though the pandemic has turbo-charged grocers’ sales – with families spending an extra £15billion on 7billion more meals at home since last spring, according to Kantar.
Morrisons has, in the most part, led the field. It is the fastest growing ‘big four’ supermarket beating Tesco, Sainsbury’s and Asda with a thumping 13.9 per cent increase in sales in the 12 weeks to February 21.
The answer to its lacklustre share performance lies, like its rivals, in rising costs from keeping its staff and customers safe – which ballooned by another £10m by January – and its decision to voluntarily pay its £230million business rates bill.
Profits therefore have not jumped with sales. They are set to come in between £190million and £210million, down from around £400million the year before.
When Morrisons – led by boss David Potts – announces its results for the year to the end of January, shareholders will look out for the latest sales figures.
Analysts believe they will rise 7.9 per cent. Morrisons will also be asked about the extensions to its deals with McColl’s and Amazon, which is stocking its own-brand products in the US giant’s first bricks-and-mortar store in west London.
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