Morrisons Recovery On Track, Profits Doubled

Tue, 25 Sep 2007
 
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British supermarket chain Morrisons revealed better-than-expected trading performance as it posted a near-doubling in half-year profits last Friday and said recent business had been good.

The grocery retailer said like-for-like sales grew by 3 per cent in the seven weeks since the end of July and said pre-tax profits had risen to £266.3m, from £134.2m in the same period last year, despite a slowdown in trading during the summer’s poor weather and a hike in interest rates .

But it warned that consumers may face an increase in food prices due to sharp rises in the cost of meat, milk and flour following a poor growing season for farmers and soaring wheat prices.

Chairman, Sir Ken Morrison, said that food prices would have to rise but the company would remain competitive.

"If we don't manage to achieve some price increases the agricultural market would be decimated," Sir Ken said.

"We need to get consumers to spend a little bit more of their disposable income on food ."

Morrisons recently invested £450m in overhauling its brand image and estate and also decided to re-launch both its premium and low-cost range of foods – The Best and Value - with new packaging, as part of the company’s fresh look.

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