A profit warning has seen shares in Morrisons drop by around three per cent.
The retailer said the problems uncovered at the Safeway chain, during the merger, would knock £40m off its annual earnings.
It said it now expects to report pre-tax profits before exceptional items of between £320m and £330m, compared with forecasts of about £364m.
Morrisons will be revealing its results next week, but the announcement initially saw its shares fall by five per cent, but afternoon trade saw a slight recovery to a fall of just three per cent.
It is the second time in the space of a year that Morrisons has warned on profits.
The company, which is now the fourth largest multiple in the UK, has undergone difficulties with it merger of the Safeway business since buying it for £3 billion last year.
It said last year it was accelerating the conversion of Safeway stores into Morrisons outlets. Sales at Safeway-branded stores have been poor, although the rebranded shops have performed well.
Morrisons said the £40m charge followed a "review of Safeway supplier balances and follows issues encountered with the Safeway accounting systems during 2004".
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