Britain's fourth biggest supermarket Morrisons signalled it would cut its dividend in 2015 after it reported its lowest annual profit in eight years, hurt by a fierce industry price war.
The profit slump reflects Morrisons' strategic U-turn last year when it said it would spend £1 billion on price cuts over three years to stem the loss of shoppers to the discounters Aldi and Lidl.
Last month the group named former Tesco executive David Potts as its new CEO, succeeding Dalton Philips, who was ousted in January after failing to revive the grocer over his five-year watch.
The group, which trails market leader Tesco, Wal-Mart's Asda and Sainsbury's in annual sales, today reported an underlying pretax profit of £345m in the year to February 1.
That compares to analysts' average forecast of £342m and £785m made in 2013-14. It represents a third year of decline in a row.
The supermarket group also wrote down the value of its property portfolio by £1.3 billion, due to the tough market conditions.
As a result it posted an overall loss before tax of £792m.
"Last year's trading environment was tough, and we don't expect any change this year," said Chairman Andrew Higginson.
Despite the slump in profit the firm is paying a total dividend of 13.65 pence for the full year, up 5%.
However, it signalled lower payouts in the future, guiding to a dividend of not less than 5 pence per share for 2015-16.
The firm also said it would invest more in cutting prices in the current year and slow down the opening of convenience stores.
