Morrisons must beware the sad fate of turkeys

MARKS & Spencer may be feeling the competitive breath of Asda as the supermarkets group harnesses the Wal-Mart juggernaut to continue its assault on the clothing market.

But it appears that Morrisons, struggling to halt the sales slide at Safeway after its £3bn acquisition in March, could be next in the firing line.

Talk among suppliers suggests that Asda and Tesco are starting to apply pressure to their non-food suppliers to cut prices in the run-up to the crucial Christmas season. The pair are already causing substantial pain in the High Street as shoppers choose to pile their trolleys with CDs, DVDs, and toys, as well as clothes and groceries.

Insiders suggest the number one and two supermarket chains both sense the vulnerability of Morrisons - until recently one of the most successful groups in the sector - since the Safeway deal.

Figures from research agency Taylor Nelson Sofres last week suggested that Safeway's sales fell £1.24bn in the 12 weeks to August 15.

That masked an 18% growth in the core chain of Morrisons, which last month was forced to issue its first profits warning in 37 years.

What with the market share gift being handed out by the flailing Sainsbury, Tesco has steamrollered ahead to lift its share from 26.8 to 28.1%. And turnover was up a colossal 10% in the same period to £4.7bn.

Asda could move up only a fraction to 16.6% but now scents the possibility of something more dramatic at the expense of Morrisons.

Safeway has never been a big Christmas destination because its stores are too small. And Morrisons has declared it is not interested in the non-food market.

If the Big Two can make a telling strike this Christmas, it could be a huge blow to Sir Ken Morrison's plans to absorb Safeway.

The potential of another profits warning from Morrisons in January was once unthinkable. Being caught in a pincer movement by Asda and Tesco makes it a distinct possibility.

DAMNING reports from financial regulators on both sides of the Atlantic last week made clear that Shell had known it was overstating oil reserves as long ago as 2000, but ploughed on in the most cynical way to keep its investors happy.

The company's most senior executives were involved in this brazen deception. Three, including disgraced former chief Sir Philip Watts, have been ousted.

But now, Pirc, the governance advisory group, has flagged up the extraordinary possibility that Watts and former production director Walter van de Vijver could be in line to net millions from share options in addition to their pay-offs which, in the circumstances, all right-thinking shareholders should regard as egregious.

For a company currently regarded with such opprobrium - and whose present and former executives still face the possibility of criminal prosecution by regulators - this is unacceptable.

Shell should guarantee that these options will never be exercised.

THE government's proposed Policyholder Protection Fund - the safety net it reckons will rescue victims of pension wind ups - has already attracted a degree of scepticism about its level of funding and the risks associated with an industry levy.

Now, however, senior executives in the industry are raising doubts about the quality of people who will run the operation. Most staff of the current watchdog, Opra, will move seamlessly over.

And by the way, 40,000 civil servants in the Department for Work and Pensions are facing the chop, so they will fill more of the jobs.

PPF will need to make some sophisticated risk-based judgments about funding levels of pension schemes, a task that executives say will need staff of an extremely high calibre to carry out rather than jobsworths from the DWP.

If there were any doubt about the seriousness of what's at stake, think only of the 40,000 members of the woefully underfunded Turner & Newall pension scheme.

Friday's announcement by the scheme's trustees that they rejected as inadequate the cash on offer from the parent company's main creditor, US financier Carl Icahn, marked the latest lurch towards collapse.

A wind-up isn't a matter of if but when.