LONDON: Britain’s fourth biggest supermarket chain, warned more expensive food imports were creating uncertainties after a new management team delivered a first rise in annual profit in five years. Shares in Morrisons, which trails market leader Tesco <TSCO.L>, Sainsbury’s <SBRY.L> and Asda <WMT.N> in annual sales, fell as much as 6 percent after the group also flagged an increase of up to 50 million pounds ($61 million) in depreciation and pension costs in 2017-18. It also faces higher staff costs.
“There are some uncertainties ahead, especially around the impact on imported food prices if sterling stays at lower levels,” the company said on Thursday. Morrisons said all the increased costs were incorporated into its plan and it was confident its turnaround was on track. However, the stock was down 12.7 pence at 234 pence at 1110 GMT, the cautious comments taking some of the shine off an improved performance under Chief Executive David Potts. Former Tesco executive Potts joined Morrisons in 2015 with the job of reviving the group after it was damaged by the rise of discounters Aldi and Lidl in its northern England heartland. Potts has delivered a steady improvement in trading, helped by more competitive prices, improved product ranges and availability and better customer service, resulting in a 22 percent rise in the firm’s shares over the last year.
