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Morrisons is at risk of falling out of the FTSE 100 due to a severe drop in its share price and concerning recovery plans.

The supermarket chain has been in the list for more than 14 years but as sales have fallen its share price has reduced by 17% this year.

In the last quarterly reshuffles in June and September, Morrisons missed demotion and the final decision will be made by the London Stock Exchange. This will be decided on Wednesday based upon the closing price of the day before.

The new chief executive David Potts has been attempting to make sure the company’s fortune is not all lost but the supermarket has been under pressure through a tough trading period.

Morrisons announced a 2.6% drop in sales last month for the three months to November, which meant that there was a further fall in share price.

The supermarket also faced its worst result in eight years back in March when there was a 52% drop in annual profits to £345 million.

It is no surprise that Morrisons is struggling considering the current state of the sector due to price wars with the big four supermarkets because of the rise of the discounters.

Morrisons has had to make several losses and this included selling 140 “M” local convenience stores that did not make any profit as a result of needing to focus on the larger stores.

 

 

Morrisons reported that third-quarter sales were affected by 2.4% because of the cut backs on promotional vouchers.

Like-for-like sales, which excludes fuel, fell by 2.6% in the 13 weeks to 1 November but like-for-like sales online rose by 1% in the third quarter.

Morrisons is the fourth largest supermarket, with Tesco, Sainsbury’s and Asda in front of them but discounted supermarkets such as Aldi and Lidl are creeping up behind them.

As there has been so much competition between the big supermarkets more recently, price wars have been initiated to try to make sure customers do not start shopping elsewhere instead.

The supermarket did report a 52% drop in annual profits to £345 million in March, which was its worst result in eight years so any drop in sales at Morrisons is bad news.

Morrisons is trying to turn it around and in September reported that it would sell 140 “M” local convenience stores in a £25 million deal. This was because many of the convenience stores did not make enough profits and this resulted in the closure of 11 “M” stores.

Christmas is not that far away and on Friday the company will launch its Christmas marketing campaign, which includes using staff to promote their festivities opposed to celebrities Ant and Dec.

The discounters rise again as Aldi UK will launch online sales next year because it announced record annual sales in 2014.

Aldi is currently the UK’s sixth largest supermarket in terms of market share but that could be about to change when it starts selling wine online and non-food offers in the spring.

The German discounter stated that sales rose 31% to £6.9 billion in the 12 months to 31st December, which is way ahead of last year’s figure of £5.27 billion. Aldi plans to open 65 new stores this year and already has 598 stores in the UK.

Despite the good news for the supermarket, operating profits did fall to £260.3 million from £271.4 million.

Customers will also benefit from having a home delivery option and collection from third party locations.

Aldi is slowly climbing up the market and this could be another breakthrough for the discounted supermarkets as they are gradually providing the services that the big four already do.

 

Nationwide building society has reported a 54% rise in annual pre-tax profit to £1.04 billion. It has now regained its position as the UK’s second largest mortgage lender. The firm said that they accounted for nearly a third of new mortgage lending last year. In the year before, the building society saw a £667 million profit.

After nine years as chief executive, Graham Beale is expected to retire next year, Nationwide announced. In the mean time, the search for a replacement would begin. Beale served on the board of the building society for 13 years and first became the chief executive shortly before the financial crisis hit in 2007.

As the pace of house price growth eased, the firm expected growth to moderate in the years ahead but their net interest income, which Nationwide receives from savings deposits and its own investments, rose £458 million to £2.8 billion. Nationwide also said that savings deposits grew by £1.9 billion.

Net mortgage lending which are new mortgages advances minus those repaid in full, amounted to £7.1 billion in the year to the 4th April, which was down from £9.9 billion the year before. Nationwide therefore had a 31.2% share of the UK mortgage market.