Morrisons relegated from FTSE 100

Morrisons is to be relegated from the FTSE 100, the culmination of its share price being on a downward trajectory for more than two years.

The supermarket group has struggled to find favour with investors, who have been concerned with rising costs despite the company generally considered to have responded well to the pandemic.

More recently, it has reported strong Christmas sales, a new pay deal for staff committing to a minimum rate of £10-per-hour, the conversion of 300 McColl’s convenience stores to Morrisons Daily, and the £40m acquisition of seafood wholesaler Falfish.

But its share price has remained subdued and well below the levels it enjoyed a couple of years ago. In August 2018, Morrisons shares were trading above 260p, valuing the retailer at around £6.5bn. But its value has slipped and closed last night at 169p, giving it a market cap just above £4bn.

The quarterly review of the FTSE 100 has confirmed the Bradford-headquartered retailer will leave the list of the UK’s most valuable public companies later this month.

Morrisons was only 111th on the list, which means it is demoted to the FTSE 250 along with South West Water owner Pennon Group. They are being replaced by Weir Group and Renishaw.

Morrisons went public in 1967 – before it even had any stores in Lancashire – and entered the FTSE 100 in April 2001.

It has only been outside the list for just three months in the last 20 years, after a strong Christmas in 2015 saw it bounce straight back after relegation.

As well as a being a blow to its prestige, leaving the FTSE 100 will mean some tracker funds held by institutional investors will look to sell their stock.

Morrisons is Yorkshire’s third most-valuable public company, behind chemicals company Croda International and housebuilder Persimmon.