WM Morrison is on a mission to be leaner and meaner.
Under CEO David Potts, 'in' have come aggressive price cuts while 'out' are a series of ill-fated ventures including a minority stake in US online grocery business Fresh Direct and M-Local, a hastily assembled collection of convenience stores.
Potts has turned his focus to the grocer's core stores (all 492 of them) and restocked them with fresh products popular with their local communities. An online distribution deal with Ocado dubbed by the house broker as the “most mind-blowing deal in grocery history” - for the wrong reasons - has been renegotiated.
The result may be a return to form for the UK's fourth largest retailer which employs 120,000 and is also the country's second largest manufacturer of fresh food.
Read more: Investors eye strong earnings at Morrisons
The previous CEO Dalton Philips had attracted the ire of Morrisons' life president Sir Ken Morrison who blasted him for destroying the company founded by his father. The latest litmus test for the Bradford-based company, and former Tesco man Potts, will come at interim results this week.
The supermarket giant is forecast to report a 0.7 per cent increase in like-for-like sales for the first half of the year. That would mark the best half-yearly sales performance in four years. An uptick would spur optimism that Morrisons, which has 10.6 per cent share of the grocery market, is starting to win back customers from discounters Aldi and Lidl. But the proof of the pudding will be in where the share price goes next.
The stock has rallied 30 per cent since the start of the year but an estimated 21 per cent of shares are in the hands of short-sellers, who are betting on a fall. Thankfully for Morrisons' shareholders, Potts is showing a flair for partnerships as well as a fondness for corporate housekeeping. His most high profile tie up so far has been to supply food to Amazon.
Earlier this week, he ramped up ties with the online behemoth, unveiling plans to add its lockers to Morrisons' supermarkets. Potts has avoided the wrath of Sir Ken whose family still owns a chunk of the grocer. But he has to keep other shareholders sweet too. More than a year into the job, it's time to deliver. All eyes will be on this Thursday’s results.