Morrisons has warned that its financial performance has been hit by the continuing costs of the conversion of Safeway stores acquired last year. The retailer cautioned that the cost of running two distribution, administration and IT functions will remain higher and take longer to eliminate than originally stated. These costs will not be reduced until the conversion programme is completed in November.
'It is clear that these costs will cause operating margins to run significantly short of last year's level for much of 2005,' the retailer said.
Morrisons said that it would provide more detail on how badly the profit and loss account will be affected at its AGM on May 26, when it will also comment on its attempts to recruit a new finance director and non-executive directors.