Week ahead: Morrisons gears up for online shopping

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SUPERMARKET chain Morrisons is tipped to post a 6 per cent fall in full-year profits to about £887 million on Thursday, amid evidence it is lagging its big rivals in both convenience store and online grocery shopping.

Morrisons, which has a 15 per cent market share in Scotland, reported like-for-like sales fell 2.5 per cent in the six weeks to 30 December. And market research outfit Kantar Worldpanel said the group was the only one of the “big four” grocers to see a sales dip in the 12 weeks to 17 February, down 1.3 per cent.

However, it is believed Morrisons has seen some recovery in its meat sales since the horsemeat crisis, as it sources all its beef in Britain.

Dalton Philips, chief executive of Morrisons, will again be quizzed by City analysts on progress in rolling out convenience stores and online operations, with some analysts expecting a major internet announcement.

The company recently bought 49 shops from failed DVD and games rental chain Blockbuster, and seven from collapsed camera retailer Jessops, to drive the convenience store business.

Catalogue chain Argos will deliver more sales cheer on Thursday as it continues to benefit from turnaround efforts and the demise of electrical chain Comet.

The City expects parent Home Retail Group (HRG) to say Argos sales rose 2.1 per cent in the eight weeks to 
2 March, a slowing on the 2.7 per cent rise seen in the 18 weeks to 5 January. At its last update, HRG said the internet now accounted for 42 per cent of revenues at Argos.

HRG’s DIY business, Homebase, is expected to remain under pressure, with ongoing declines in sales.

Fashion retailer French Connection will lay out further details of its turnaround plans on Wednesday as it announces another year of losses. Analysts at Seymour Pierce forecast French Connection will make a pre-tax loss of £7.8m, the company having already told the market that losses would rise to between £7.5m and £8m in the year to 31 January.

Security firm G4S, which was widely criticised for its bungles at the London Olympics last year, runs out its full-year results on Wednesday.

Broker UBS forecasts a 24 per cent slump in pre-tax profits to £194m after G4S took a £70m hit on its Olympics work.