Morrisons is expected to reveal a huge boost in profits in a market update next week as store overhauls and price cuts pay off.
Analysts have predicted the grocer will post a massive 54 per cent rise in pre-tax profits for 2016, rising from £217 million to £335 million.
A like-for-like sales growth of 1.8 per cent has also been forecast by analysts at banking firm Jefferies.
This follows promising figures from 2016’s festive season, with Morrisons posting a 2.9 per cent rise in sales for the nine weeks to January 1 – its best performance for seven years.
Morrisons’ chief executive David Potts has guided the grocer from its seemingly terminal downfall under its former boss Dalton Philips, to become the Big 4’s fastest growing retailer.
READ MORE: Morrisons reports best sales in 7 years
“Much has been achieved in the past two years through reinvestments into store hours, improved assortment, sharpened value and a catch-up refurb programme (with around a third of stores done in the past 18 months),” Jefferies analyst James Grzinic said.
Despite the grocer’s stellar performance of late, it still faces an increasingly fraught market.
Tesco’s surprise merger with Booker and continued market share battles with Aldi and Lidl will add further pressure to rising inflation concerns.
Recent Office for National Statistics (ONS) figures suggest food prices rose by 0.5 per cent in January, triggering a 0.3 per cent fall in retail sales.