Morrisons has issued its first-ever profits warning, after uncovering a host of problems at Safeway, the chain it paid £3 billion for in March.
It will be the first about turn in profits since the northern-based chain joined the stock market in 1967.
The chain has long been a favourite in the City for its reliability in meeting and beating forecasts. It reported profits of £320 million last year and analysts were expecting up to £590m this year. However, some are predicting profits to be around 33 per cent lower at around £390m and have described the situation as very disappointing.
Shares in Morrisons tumbled from 225.25p to 200p, as Sir Ken said accelerating sales declines in the Safeway business would leave first-half profits at £120m-£125m. He blamed the sales downturn on problems in integrating Safeway and cultural differences. Sir Ken said: “We have a unique northern character and once this culture is throughout Safeway’s business we’ll see a big change in the results.
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