Morrisons poor performance to result in FTSE 100 demotion

The supermarket wars could see its first major casualty as Morrisons is at risk of falling from the FTSE 100.

The Bradford-headquartered supermarket is expected to be demoted from the list of the UK’s largest companies this afternoon following the latest quarterly review.

Morrisons is currently 111th on the London stock market as sales figures continue to decline, with its latest financial results revealing that total sales excluding fuel were down 2% in the 13 weeks to November 1, or down 4.6% including fuel. Like-for-like sales declined 2.6% excluding fuel, and 5.1% including fuel.

Over the past month, the supermarket chain has also experienced an 11% drop in its share price, which is close to a five-year low.

Furthermore, in the first half of 2015 Morrisons’ total turnover was £8.1bn, which was down 5.1% compared to the same period last year. During this time, the supermarket only opened one new store (26,000 sq ft) and five M locals (14,000 sq ft), and in September, announced the closure of 11 stores as a cost-cutting strategy that will ultimately see 900 jobs losses.

As it currently stands, Morrisons market value is £3.56bn, with the chain’s closest competitor being Randgold Resources, which has a market value of £3.76bn.

Morrisons’ demotion to the FTSE 250 comes in the midst of a food retail revolution as shoppers are now being attracted to the low priced products from budget chains Lidl and Aldi.

Just last month, it was revealed Aldi and Lidl now account for a 10% share of all British grocery sales, which affirms the German-owned food retailers’ dominance over the UK’s ‘big four’ supermarkets - Tesco, Asda, Morrisons and Sainsbury’s.

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