Morrisons set to reveal profits up 10%

MORRISONS is expected to report an increase in annual sales and profits on Wednesday as the supermarket continues to outperform its peers.

City analysts forecast the grocery giant will post a 10 per cent rise in underlying pre-tax profits to £371 million and a like-for-like sales increase of 2.7% .

George Salmon, equity analyst at Hargreaves Lansdown, said investors will be keen to know if sales are being driven by higher prices or bigger basket sizes.

Supermarkets across the board have had to increase shop prices as costs have risen since the pound’s collapse following the Brexit vote.

While moderate inflation can help supermarkets boost their sales and profit margins, it also poses a risk as it results in diminished consumer spending power.

But Morrisons has been among the strongest performers compared to its peers over the past 12 months, with a turnaround led by chief executive David Potts bearing fruit.

But Morrisons has not been immune from market pressures. Earlier this year it axed 1,500 shop floor workers as part of a restructure.

Investors will also be keen to hear an update on Morrisons’ wholesale deal with Mccoll’s.

The tie-up, announced last Augustm will see the group supply Mccoll’s network of stores and also see it relaunch the Safeway brand.