By Jonathan Davies

Morrisons has reported its worst profits in eight years for 2014.

The troubled supermarket's profits were down 52% to £345m for the year.

Like-for-like sales which exclude new stores were down 5.9% in the year, and 2.6% in the fourth quarter alone.

Speaking to the BBC, Morrisons chair Andrew Morrison said: "This has been a controlled and a planned reset of the business - it is painful, but it is the start of a new growth period we hope."

The spiritual start of that growth period will comes, Morrisons hopes, when former Tesco executive David Potts takes over as chief executive on 16 March.

He replaces Dalton Philips who announced in January that he was stepping down after six years at the Yorkshire-born supermarket.

But Morrisons said that the rollout of its local "M" stores will be "slowed significantly", with 23 closing this year at a loss of nearly 400 jobs.

Price war

Morrisons has been one of the biggest sufferers of the supermarket price war. With Aldi and Lidl gaining market share and sales rapidly, the 'big four' - Asda, Morrisons, Sainsbury's and Tesco - have all struggled for growth. But Morrisons has been hit particularly bad.

As a result, the supermarket chain decided to invest heavily in cutting prices, even claiming to match Aldi and Lidl on their low budget prices for certain products.

Phil Dorrell, director of retail consultants, Retail Remedy, said: "This is a rout, not a reversal. With the most dated stores and weakest business strategy of the old guard grocers, Morrisons has truly been put to the sword by the rise of Aldi and Lidl.

"The brand has haemorrhaged both sales and share to the brash young discounters who took its cheap prices USP, improved it, and then unceremoniously yanked the rug from underneath it. Next to the perky German upstarts it has increasingly looked neither cheap nor cheerful.