Morrisons recovery gains momentum with profits jump and looming Amazon deal

Morrisons' turnaround will gather pace this week as the grocer posts its first jump in profits for six years and strengthens ties with Amazon.

The City is hoping for a 54pc jump in underlying pre-tax profits to £335m as the supermarket chain plans to roll out Amazon lockers across its estate.

Morrisons is expected to say the bright yellow lockers, which allow shoppers to pick up deliveries from the online giant, will now be installed in 400 Morrisons shops. David Potts, chief

executive, has been steadily stabilising Morrisons since taking charge from Dalton Philips two years ago.

Analyst consensus is for the supermarket to deliver like-for-like sales growth of around 1.6pc after Christmas trading smashed City expectations with a 2.9pc jump.

Mr Potts has won praise for agreeing a wholesale deal with Amazon, allowing it to negotiate a better contract with Ocado that means Morrisons products will delivered around the country.

The growth of internet shopping has forced retailers to ramp up investment in their online and delivery operations.

It is expected that John Lewis Partnership could cut its highly celebrated staff bonus scheme almost in half next week in order to fund its internet operations. In January, chairman Sir

Charlie Mayfield said the employee bonus would be “significantly lower”.

In 2015, Morrisons sold off its 140 convenience stores and shut 28 supermarkets. This has continued to be a drag on its total sales recovery although it has cut around £1bn of costs.

However, Mr Potts and the grocer’s management team have focused on improving the supermarket’s local food offering and introducing a premium “Best” range which was successful over the

festive season.

Last month Morrisons also launched a womenswear collection under its Nutmeg clothing range. The supermarket is one of the top 20 UK fashion retailers due to its childrenswear range.

Since Mr Potts took the helm in 2015, Morrisons shares have risen by 37pc as investors have warmed to his recovery plan. However, it is understood the former Tesco director will insist that

the firm remains in the first “fix it” phase of its recovery plan.