Britain's fourth biggest supermarket Morrisons is expected to report its lowest annual profit in eight years, hurt by a fierce industry price war, and is likely to signal lower dividend payouts going forward.

Last week Morrisons, which trails market leader Tesco, Asda and Sainsbury's, named former Tesco executive David Potts as its new chief executive, succeeding Dalton Philips, who was ousted in January after failing to revive the grocer over his five year watch.

Potts, who will start on March 16, is tasked with restoring growth in a brutally competitive market, where the traditional big four players are grappling with the rise of discounters Aldi and Lidl.

The firm has guided to a pretax profit before one off items of £335-365 million ($511-$556 million) for the 2014-15 year, while analysts' average forecast is £342 million.

That's less than half the £785 million made in 2013-14 and a third straight year of decline.

The slump reflects Morrisons' strategic U-turn last year when it said it would spend £1 billion on price cuts over three years to stem the loss of shoppers to the discounters.-Reuters