TWO years ago, the grocer that started out as a Bradford egg-and- butter merchant was catapulted to the elevated position of Britain's fourth largest supermarket.

Fresh from victory in the £3bn takeover of Safeway, Morrisons should have been able to enjoy its coup, but the triumph left a hangover.

Yesterday morning, Morrisons posted a full-year loss for the first time in its 106-year history.

Investors, although expecting the loss, were unimpressed.

After a number of profit warnings, Morrisons keeps promising, New Labour-style, that things will get better.

But the troubled grocer is finding that its investors are running out of patience.

Retail expert Anthony Platts, assistant director at the Tees Valley office of Wise Speke investment management, said: "It is clear that the takeover of Safeway has been a very punishing process financially.

"Group turnover was broadly unchanged on the year, but integration costs have hit hard.

"After a series of profit warnings, investors in the business are still being promised jam tomorrow.

"While the promise of better results once all stores follow the Morrison format gives some hope for recovery, there are still many sceptics about."

Mr Platts said one of the problems Morrisons had faced was intense price wars launched by rival supermarkets once it took over a Safeway store in a particular area.

It also had problems with dual running costs in distribution, administration and IT.

Tesco, on its pedestal as Britain's most successful supermarket, was able to slash prices to compete with new Morrisons stores in its areas.

But Morrisons, struggling with the costs of integration, was unable to compete, and found the cut-throat price wars hugely damaging.

Although it tried cutting prices, it forgot that its former Safeway shoppers were traditionally less price-conscious and likely to shop for quality rather than low cost.

Its problems have come at the same time as Sainsbury's turned a corner under its restructuring programme - "Making Sainsbury's Great Again".

Now Morrisons will have to deliver a similar turnaround plan. With a 2.8 per cent sales rise over Christmas, it could be heading in the right direction.

Analyst Tim Attenborough, of Exane Securities, said: "Last year was a lost year for Morrisons. This report was never going to be about last year's numbers. It's about what they can do going forward and the shape of the margin recovery."