Focus on retail as John Lewis and Morrisons report annual results

Supermarket Morrisons is expected to shore up falling sales when it reports full-year results on Thursday, after striking a key deal with US online giant Amazon and returning to the FTSE 100 Index.

The City expects the Big Four grocer to see some improvement in like-for-like sales, with declines of 2.1% compared to a fall of 5.9% in 2014.

However, its financial performance looks set to remain under pressure, with underlying pre-tax profits predicted to drop back for the full year to £307 million, down from £345 million in 2014, as fierce competition in the UK grocery sector continues to bite.

The group said it would also be hit by £60m of restructuring costs from store closures and axing around 700 jobs at its head office under chief executive David Potts.

It comes after the supermarket surprised the market over Christmas by reporting a 0.2% rise in like-for-like sales excluding fuel in the nine weeks to January 3.

Since then, the Bradford-based grocer has pressed ahead with plans to move the business on to firmer financial ground, announcing a trade tie-up with online retailer Amazon and price cuts to more than 1,000 products.

Meanwhile, more than 90,000 John Lewis and Waitrose staff are expected to see staff bonuses cut yet again when the partnership that owns the two firms posts a fall in annual results on Thursday.

Staff bonuses are expected to fall to 9% or 10% this year, according to respected independent retail analyst Nick Bubb, compared to the 11% staff were handed last year and 15% in 2013.