UK grocer Morrisons warns on profit

Britain's Wm Morrison Supermarkets sparked talk of an industry price war today after it posted its lowest profit for five years and said it would invest £1 billion in price cuts over three years in a bid to recover.

Britain's No 4 grocer, which has been losing market share to discounters Aldi and Lidl and lagged rivals in entering fast-growing online and convenience store markets, said its profits would more than halve this year as it tries to restore its low-price image, sending its shares plunging to an eight-year low.

Shares in bigger rivals Tesco and J Sainsbury also fell heavily, with about £2 billion wiped off the combined stock market value of the three groups.

Jefferies analysts said the scale of Morrisons' price investment was equivalent to "getting the bazooka out".
– (Reuters)