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Morrisons faces tough fight to survive

| International retailers

A leading retail analyst has warned that Morrisons is in for a tough fight to survive in the face of ever increasing competition from the discounters.

The ailing supermarket’s shares slumped 6% yesterday after Bruno Monteyne, a retail analyst at Bernstein and former Tesco director, warned: “Morrisons is the only retailer who potentially may find out the UK has moved on and there is no more need for it”.

With the group searching for a new Chief Executive to take over from Dalton Philips, Monteyne added: “Morrisons can’t simply go back to the old days. Its historical place has been taken by the discounters.

“It does not yet know what it can offer UK consumers that is a valid alternative and sufficiently different from Asda and the discounters. Morrisons is a round peg in search of a square hole.”

Despite the profit warning that Morrisons sounded last March, Monteyne also suggested that City analysts should have downgraded their predictions on the chain’s future profits given similar moves for rivals such as Tesco and Sainsbury's. He said: “The argument that ‘Dalton Philips called it early with the right plan and therefore the consensus adjustments last March were sufficient’ doesn’t stack up...Morrisons doesn’t really know where it is headed.”

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